BlackRock Launches Climate Transition-Focused Private Debt Fund
Investment giant BlackRock announced today the launch of a new Climate Transition-Oriented Private Debt Fund, aimed at providing investors with exposure to middle market companies, with a focus on low-carbon transition investment opportunities.
According to the firm, the launch of the new strategy comes in response to client demand for transition-oriented solutions, with a recent BlackRock survey indicating that 98% of investors have set a transition investment objective for their portfolios, and three quarters of institutional investors have set net zero objectives.
BlackRock has also identified the transition to a low-carbon economy as one of its key “mega forces” that the investment manager anticipates will create significant profitability shifts across economies and sectors, including massive reallocations of capital.
James Keenan, Chief Investment Officer and Global Head of Private Debt for BlackRock, said:
“We are harnessing the breadth and experience of our global platform to deliver a quality credit portfolio that focuses on income. The strategy focuses on the transition to a low-carbon economy as one of several mega forces driving investment opportunities.”
Launched within BlackRock’s Global Private Debt platform, the new fund is predominately focused on European and U.S. middle market direct lending, with investments aimed at accelerating borrowers’ climate transition agenda by providing support and resources. The fund utilizes a proprietary Climate Transition Rating Framework, enabling borrower selection on companies at a variety of stages of transitioning to net zero emissions, with selection criteria focused on borrowers’ climate transition characteristics.
BlackRock added that it will actively engage with portfolio companies to support the implementation and delivery of their carbon reporting and decarbonization targets.
Sonia Rocher, Portfolio Manager and Sustainability Investing Lead for BlackRock’s Global Private Debt platform, said:
“The new fund is designed to respond to client demand for transition-oriented private debt strategies by investing in mid-sized firms with carbon emissions reduction goals or companies providing climate solutions. It supports them in their carbon reporting and achievement of their roadmap to reduce emissions. We are pleased to offer investors all the benefits of a traditional private debt portfolio with the additional selectivity to consider the transition.”