Global asset manager BlackRock has reached a first close on its €500 million European-focused renewable energy fund, Renewable Income Europe.
The €275 million first close was achieved with commitments from European and Asian institutional investors ,as well as an undisclosed contribution from the European Investment Bank. BlackRock says the new vehicle has a 20-year buy-and-hold strategy and will target unlevered investments in European wind and solar projects. It will invest across the continent but expects the majority of its opportunities to come from western Europe.
“Renewable energy has become a mainstream asset class within infrastructure. Demand for renewables in developed countries is being driven by the need to replace an ageing power generation fleet, improvements in cost competiveness and concerns about climate change. For investors, the sector can provide opportunities for less correlated, inflation-linked, long-duration income and attractive risk-adjusted returns,” said BlackRock head of European investment Rory O’Connor.
Renewable Income Europe comes after BlackRock raised £500 million in December 2014 for the open-ended BlackRock Renewable Income UK. The latter is expected to “reopen to investors when the capital from the December 2014 close is substantially invested”, a spokesperson previously told Infrastructure Investor.
In addition to the European and UK-focused funds, the asset manager also runs the BlackRock NTR Renewable Power Fund, a platform set up with Irish renewables developer NTR. That fund closed in 2013, raising $611 million along with additional co-investment capital. It is now fully deployed in 36 wind and solar projects in the US, Canada, Ireland, England, France and Sweden.
BlackRock’s infrastructure group manages about $8.3 billion in investor commitments spread across a variety of strategies across infrastructure debt and infrastructure equity. The asset manager has raised over $2 billion for renewable energy since 2011 and now manages over 66 wind and solar projects across Europe and North America.
Recently, BlackRock has undergone a major restructuring of its management team that includes a merger of its infrastructure and real estate platforms into a new real assets unit under current head of infrastructure Jim Barry. According to a December 2015 survey commissioned by BlackRock, 60 percent of European institutional investors intend to expose their exposure to real assets.