BlackRock launches PE impact strategy

BlackRock joins the likes of TPG, Bain Capital, KKR, Blackstone, Apollo, Morgan Stanley and Hamilton Lane in creating a dedicated impact vehicle.

BlackRock has become the latest asset management giant to launch a private equity impact investing strategy.

The $9.1 trillion investment firm registered BlackRock Private Equity Impact Capital in Luxembourg in June, according to filings seen by affiliate title New Private Markets.

It is unclear how much the fund is targeting. BlackRock declined to comment.

BlackRock joins the likes of TPG, Bain Capital, KKR, Blackstone, Apollo, Morgan Stanley and Hamilton Lane in launching a dedicated impact vehicle.

The move comes just months after BlackRock signed a deal with Singaporean investment fund Temasek to launch Decarbonization Partners, a series of late-stage venture capital and early growth private equity funds to invest in “decarbonisation solutions”. The venture is seeking $1 billion for its debut fund, including $600 million from BlackRock and Temasek collectively.

“The world cannot meet its net zero ambitions without transformational innovation,” Larry Fink, BlackRock chairman and chief executive, said in an April statement. “This partnership will help define climate solutions as a standalone asset class that is both essential to our collective mission and a historic investment opportunity created by the net zero transition.”

BlackRock also held a $4.8 billion final close on its third global renewables fund in April, almost doubling its $2.5 billion target. The firm plans to raise at least $100 billion for alternative investments by 2023, Private Equity International reported earlier this month.

Approximately 90 percent of capital in the firm’s alternatives business is from institutional investors, and the remaining 10 percent in private wealth. BlackRock plans to shift this with a goal of about “25 percent or maybe even plus” for the latter in the coming years as the growth of global wealth and prevalence of alternatives in wealth client portfolios becomes more significant.

Sustainable and impact investments have proved especially popular among the private wealth and family office community. Some 80 percent of the latter are engaged in some form of sustainable investing, and 74 percent expect to raise their exposure over the next year, according to a BlackRock Global Family Office Survey from August. Dedicated strategies are the most popular route for entry.

“It’s very much that thematics play strongly within the wealth arena, as well as obviously the high return,” Michael Dennis, head of APAC alternatives for BlackRock, told PEI in March. “We’ve seen success, for example, in Japan in areas such as sustainability, and in Asia ex-Japan in healthcare or tech.”

Toby Mitchenall and Carmela Mendoza contributed to this report.

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