Fundraising

Exclusive: BlackRock closes renewables fund on $1.65bn

Almost triple the size of its predecessor, the vehicle will look to invest across OECD markets and seek net returns of between 9% and 10%.

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BlackRock has closed its second Global Renewable Power Fund on $1.65 billion after securing commitments from 67 LPs.

Launched in 2015, the firm’s fourth renewable energy vehicle exceeded its $1 billion target and is nearly three times the size of GRP I, which closed on $611 million in 2014.

The fund’s investor base spans pension funds, insurance firms and investment companies in North America, Europe and Asia, with strong support from GRP I investors, BlackRock said. Recent commitments have come from the New Mexico State Investment Council, as well as the Minnesota State Board of Investment and the Orange County Employees Retirement System, according to Infrastructure Investor data.

Investors also comprise ASGA Infra Master, Bord Na Mona Employees Superannuation Scheme, Gebäudeversicherung, Kingfisher Pension Fund, Allgemeine Rentenanstalt Pensionskasse, Aurum Nominees, Caisse de pension de la Société suisse de Pharmacie, Golding Infrastructure, VKR Holding, Wide Invest, Wüstenrot & Württembergische, AXA, Deutsche Arzteversicherung, Matignon Alternatif, Valida Infrastructure Fund, Arca Previdenza, Spinnewco and the London Borough of Haringey Pension Fund, according to Companies House.

GRP II, which is already 20 percent invested, seeks net returns of between 9 percent and 10 percent from in-construction or early-stage operating onshore wind and solar sites. Assets secured so far include a 49 percent stake in a 211MW wind farm in Texas, 100 percent of a 160MW wind farm in Norway, a 49 percent share in a 150MW solar portfolio in Minnesota and 90 percent of two Japanese solar projects totalling 55MW.

The fund aims to deploy its capital in North America (50 percent), Europe (30 percent) and selected other OECD markets (20 percent) during a five-year investment period. Its predecessor has plugged equity into 36 wind and solar assets across six countries within three years, ahead of its planned time frame.

“We believe that the active renewable power market mitigates current asset class challenges for investors such as slow deployment of capital and elevated valuations in core infrastructure funds,” BlackRock said.

“We have maintained the discipline of investing exclusively in renewable power, one of the most active sectors for dealflow in the growing infrastructure asset class,” added David Giordano, portfolio manager of the fund.

BlackRock said it now manages over $4.2 billion of equity assets in the renewable power sector, making it the largest private markets-dedicated renewables manager.