NMSIC backs BlackRock as renewables fund hits $1.4bn

A $50 million allocation from the New Mexico State Investment Council has helped bring BlackRock's Global Renewable Power Fund II to $1.44 billion, according to documents from the endowment's June meeting.

NMSIC is the second US institutional investor this month to commit to BlackRock's sophomore renewables vehicle, following a $100 million investment from the Minnesota State Board of Investment. According to a BlackRock presentation that NMSIC made public, GRP II has made five investments and the endowment says it is “targeting” $1.6 billion. 

NMSIC described GRP II as a value-added renewable power vehicle targeting low double-digit returns. The fund has invested $259 million since first close, including in wind farms in Texas and Norway and two solar projects in Japan.

Like BlackRock's first renewables fund, GRP II invests in operating and late-stage contracted wind and solar projects, primarily in OECD geographies. BlackRock's co-investment is 3 percent of capital commitments, and the fund's investment period is 5 years from its first capital call. GRP II's distribution waterfall involves an 8 percent preferred return to limited partners and 15 percent carried interest, with an 80 percent catch-up provision.

BlackRock's overall renewables platform has $3.4 billion of investor commitments. GRP II's predecessor built a portfolio of 36 projects in six countries within 36 months.

The firm did not reply to a request for comment.

For NMSIC, the allocation to BlackRock brings its total energy commitments to $650 million, 34.3 percent of its real assets target. The $21.5 billion endowment said it is considering two additional energy investments this year, which would add to its upstream oil and gas exposure.