BlackRock launches UK DB fund

The semi-open-ended vehicle, targeting UK defined benefit schemes, is aiming for a 5% net annual yield through investments in infrastructure debt, renewable energy, real estate debt and other alternative investments.

BlackRock has launched a new fund targeting UK defined benefit (DB) schemes, aiming to provide access to a number of alternatives investments under a single portfolio.

The semi-open-ended UK Strategic Alternative Income Fund will target investments in infrastructure debt, renewables, real estate debt, long lease property and direct lending across the UK. Infrastructure Investor understands the fund, structured as a Luxembourg partnership, will aim roughly for a 50/50 split between debt and equity investments. 

It will access these inflation-linked investments through a mixture of funds, bespoke mandates and direct deals as it aims to generate a net annual yield of 5 percent. Following an initial four-year lock-in, investors will be provided with yearly liquidity windows.

BlackRock explained the fund’s managers have flexible allocation guidelines across the asset classes it is targeting, but did not mention any targets. It added the fund will draw on the resources and expertise of the asset manager’s Alternative Investors platform, which employs 85 people across BlackRock’s real assets business in Europe and 580 across its broader global platform.

BlackRock did not respond to a request for comment on the intended size of the fund at press time.

In a December 2015 survey conducted among BlackRock’s largest institutional clients, representing some $6.6 trillion, 53 percent said they intend to increase their allocation to real assets this year, with 47 percent stating they will grow their real estate allocation.