Documents from NMSIC’s board meeting this week show GEPIF III had raised $2.1 billion before the endowment’s commitment. The fund is a continuation of an energy infrastructure strategy that BlackRock acquired last year from private equity firm First Reserve.
NMSIC’s commitment brings the endowment’s exposure to energy-linked assets, including midstream infrastructure and power generation, to $845 million or 39.2 percent of its $2.6 billion real assets target. NMSIC’s total real assets exposure to BlackRock funds is now $250 million, 10.6 percent of the portfolio.
In 2014, the endowment committed $100 million to First Reserve Energy Infrastructure Fund II, now managed by BlackRock, and $50 million last year to BlackRock Global Renewable Power Fund II.
GEPIF III reached first close on $1.5 billion in July and is targeting $3.5 billion. The fund will invest in conventional and renewable power generation, midstream energy, transmission and distribution, according to NMSIC’s documents. Net return targets are in the low double digits and average cash yield targets are in the high single digits or low double digits.
When BlackRock acquired First Reserve’s energy infrastructure funds, the investment vehicles managed around $3.7 billion of committed capital. The management team for the funds, led by Mark Florian, remains in place at BlackRock. Florian, now a managing director of the firm’s global energy and power team, told Infrastructure Investor in July there was discussion to alter the strategy he and his team had put in place.
“We talked about whether there would be changes in our strategy when we moved to BlackRock, but the firm answered that it did not want changes,” Florian said. “The firm didn’t want to change anything about our strategy since it had been successful for investors in the past.”