BlackRock Real Assets has hired Pat Eilers from private equity firm Madison Dearborn Partners to build a North American equity strategy focused on conventional power and energy, in a move that could lead to new product launches.
“We are extending our capability beyond renewable power and Pat is the first step in that regard,” Jim Barry, BlackRock’s head of real assets and leader of its infrastructure team, told Infrastructure Investor. “We are hiring a handful of people initially to work with Pat, but he is also leveraging the wider resources of the platform, whether on the renewables, debt or infrastructure solutions side.”
Eilers, who joins as a managing director in BlackRock's infrastructure equity team, oversaw Madison Dearborn’s energy, power and chemicals practice. He served on the boards of several energy companies, including Magellan Midstream Partners, First Wind, US Power Generating Company and Green Plain Partners. Prior to his tenure at Madison Dearborn, he was a director at Jordan Industries and an associate at IAI Venture Capital.
BlackRock has to date invested in renewables in North America, although it has done conventional power investments in Mexico. Barry says BlackRock has been seeing dealflow beyond renewables for years and is now ready to monetise some of those opportunities, doing deals in the $50 million to $100 million range.
“In the short term, we are using some pools of capital that we have, some in our infrastructure solutions business, but also more broadly across BlackRock’s alternatives business, where there are opportunistic pools of capital” to fund investments from the new power strategy, Barry explained. “But really that’s just a step with a view to going and raising new products. Whether we go there in one big step, or two steps through separate accounts first, the goal is to have commingled products.”
While Eilers worked at the lower end of the private equity risk spectrum at Madison Dearborn, Barry said the new power strategy “will stay in the infrastructure end of the risk spectrum”, investing in the likes of highly contracted midstream and power generation first in North America and then potentially expanding to other geographies.
In a March keynote interview, Barry saw risk as key to the infrastructure proposition: “The big challenge in infrastructure equity is there’s no common language of equity risk. You put 20 investors in a room and ask them to define core [infrastructure] and you get 20 different definitions. Most people, when they talk infrastructure, use the language of low risk – the language of core. But I see balance sheets bleeding up the risk curve and that’s driving CIOs nuts. The challenge is people talking the language of low risk and then going up the risk spectrum.”