The UK’s largest green fund has raised £1.1bn in total commitments after strong demand for long-term income from the renewable power asset class.
BlackRock, the world’s largest asset manager, said that renewable power is now one of the most active sectors for deal flow in the growing infrastructure asset class, with 63% of institutional investors intending to increase their exposure.
Its Renewable Income UK (RIUK) fund had already invested over £600m in 40 wind and solar projects prior to breaking through the £1bn barrier, with investors increasingly showing interest in ESG considerations.
Fund manager, Rory O’Connor, said: “BlackRock continues to see the UK as an attractive market for wind and solar assets, and globally manages more than £3.7bn of equity assets in the renewable power sector.”
BlackRock said that as investors seek to generate sufficient returns in the current environment, many are turning to infrastructure and renewable energy assets to meet long-dated liabilities.
It argued that its fund was proving popular due to its stable and inflation-linked income profile, and that it aims to provide investors with immediate ownership in a cash-generating portfolio of renewable asset classes.
“The latest close of RIUK, now the largest UK renewable power fund, is testament to the philosophy and strength of BlackRock’s renewables investment platform,” BlackRock portfolio manager, Charlie Reid, said.
“We were an early mover in identifying renewables as an attractive global fundamental growth story for infrastructure investors, which is providing a flow of addressable investment opportunities that are relevant to our clients.”
Despite the fund’s success, a report from Mercer published last month revealed that just 5% of European pension schemes have considered the investment risks and opportunities posed by climate change.
This is a slight increase on the 4% of funds that were doing so last year, and comes after NASA stated that April 2017 was the second hottest since records began in 1880.
Mercer global director of strategic research, Phil Edwards, said: “Investors must consider the potential financial impacts of climate change on their portfolios.
“A proactive approach can open up investment opportunities in the green fields of the low-carbon economy.”
