BlackRock targets $2.5bn for third renewables fund – exclusive

The launch of the latest vehicle comes two years after the fund manager closed its GRPF II on $1.6bn, which has invested in more than150 projects.

BlackRock Real Assets has begun fundraising for its third global renewables fund, targeting $2.5 billion in commitments, Infrastructure Investor understands.

Global Renewables Power Fund III was launched in the first quarter of this year and is targeting a gross IRR of 12-13 percent and a gross yield of 5-7 percent, according to pension documents.

BlackRock declined to comment on the fundraising process.

The vehicle is a continuation of the strategy which saw BlackRock raise $1.6 billion for GRPF II in 2017 and $611 million for GRPF I in 2013, the latter of which began divesting last year. According to a BlackRock presentation in February to UK-based Lewisham Pension Fund, the two vehicles had invested in a combined total of more than 250 individual projects and had around $5 billion in assets under management. Lewisham Pension Fund is still mulling over whether to invest in GRPF III.

The latest fund will invest in assets on which construction is about to begin – a strategy that has drawn GRPF II to investments in wind and solar assets in countries including Norway, Taiwan and Australia. GRPF II, which originally had a target of $1 billion, was generating a net IRR of 4.8 percent at the end of Q3 2018, according to the New Mexico State Investment Council, which invested $50 million in the fund. The net IRR has been steadily increasing since the fund’s close as assets have become operational.

In October, BlackRock appointed Charlie Reid as its head of renewables in Asia-Pacific. Reid told Infrastructure Investor at the time that the firm expected to commit about $5 billion of capital in the region over the following five years. He added that BlackRock would consider launching a region or country-focused vehicle to help achieve this aim.