Investment giant BlackRock announced today plans to launch a new “perpetual infrastructure strategy,” aimed at pursuing long-term investment opportunities in the megatrend themes of energy transition and energy security.
BlackRock stated that it will work with infrastructure businesses over the long-term to help drive the global energy transition, and that it will take an active approach in helping companies transition to lower-carbon business models over time.
Anne Valentine Andrews, Global Head of BlackRock Real Assets, said:
“BlackRock is a leader in the energy transition, having mobilized over $55 billion of investments across our infrastructure strategies since their inception. Our ability to convene companies, governments and institutional clients means we are uniquely placed to deploy capital from investors globally into real assets that drive the energy transition and have a positive impact on local communities and economies.”
According to BlackRock, the new strategy is being established as the emerging green economy transition is creating a “step-change” broadly across infrastructure sectors, creating investment opportunities in several areas. In addition to targeting energy transition and energy security investments, the strategy will target areas including digital and community infrastructure, sustainable mobility, and the circular economy. The strategy aims to deploy capital in businesses including utilities, end-to-end renewable infrastructure players, data centers, grid digitization technologies, battery storage systems and hydrogen-adaptable natural gas storage and transport facilities.
The launch comes as several leading alternative investment firms are gearing up to seek long-term investment opportunities generated by the global energy transition and shift to decarbonized economies. Private equity firms Apollo and Blackstone have each recently said that they anticipate opportunities to invest $100 billion in energy transition and climate change solutions over the next decade, and each have launched energy transition-focused platforms over the past few months. Carlyle and Temasek have also recently launched energy transition and decarbonization focused investment platforms.
In its recently released TCFD report, BlackRock outlined its expectation that the “climate transition will create historic investment opportunities” for the firm’s clients. BlackRock has been an active energy transition investor for several years, and already manages one of largest climate infrastructure franchises globally.
Edwin Conway, Global Head of BlackRock Alternative Investors, said:
“We believe the intersection of infrastructure and sustainability will be one of the biggest opportunities in alternative investments in the coming years. At the same time, recent events have sharpened the focus on energy security and further compounded the need for infrastructure investment. Private markets will continue to play a pivotal role in the energy transition, and we are pleased to offer our clients another way to go beyond simply navigating the transition to driving it forward.”
BlackRock stated that it aims to launch investment vehicles under the new strategy and will be seeking founding partners in the second half of 2022. The strategy will be more than half allocated to Europe initially, with plans to become increasingly global over time.