BlackRock attracts more than $5bn for its largest alts fundraise to date

BlackRock announced the final close of its Global Energy & Power Infrastructure Fund III at $5.1 billion, making it the largest alternative investment fundraise in the firm’s history. BlackRock CEO Laurence Fink reported to shareholders that the firm had one of its best quarters in illiquid alternative fundraisings ever, generating $7 billion in new flows and commitments in the first quarter of this year. The $7 trillion firm’s alternative investment arm, BlackRock Alternative Investors, includes real estate, infrastructure, private equity, credit, hedge funds and alternative solutions strategies. BlackRock’s two previous infrastructure funds raised $3.5 billion and $4.5 billion each and the new third fund exceeded its fundraising cap. “The milestone is a testament to BlackRock’s focus on helping clients achieve better investment outcomes,” said Edwin Conway, global head of BlackRock Alternative Investors. “Investors are looking to build resiliency into their portfolios and ballast against equity market shocks by increasing their allocations to less correlated exposures in private markets.” Conway added that the fundraise for the infrastructure fund reinforces BlackRock’s belief that infrastructure will play an increasingly important role in portfolio construction moving forward. Over 50 institutional investors, including public and private pension funds, sovereign wealth funds, foundations, insurance companies and non-profit organizations across the U.S., Europe, Asia and the Middle East committed to the new offering. Investors from the prior funds represented 70% of the new fund mandates. BlackRock said the new fund builds on the same strategy as its predecessor funds. The investments will be in high-quality and essential energy infrastructure businesses and assets. Divided by geography and energy subsectors, the portfolio consists of investments in the power sector, the midstream sector and the utility sector. The power sector includes electric power generated from renewable sources including solar, wind, hydro and waste-to-energy and from natural gas, while excluding coal-generated power. The midstream sector includes energy transportation and storage. “Our strong off-market sourcing capabilities are differentiated by a disciplined investment approach focused n creating an optimized risk-adjusted return for our investors and a tailored solution for our partners and their customers,” said Mark Florian, head of the Global Energy & Power infrastructure team within BlackRock Real Assets. He added that the investment philosophy has led to strong investment deployment and origination that includes multiple repeat partnerships and BlackRock believes that the strategy will continue to create many investment opportunities for the firm’s funds.

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