BlackRock innovates with climate transition-oriented private debt fund


BlackRock has stepped into the eco-friendly investment arena, unveiling its latest Climate Transition-Focused Private Debt Fund.

The introduction of the new fund by BlackRock is primarily influenced by a perceptible swell in client demand for transition-focused investment strategies. A survey conducted by the firm spotlighted that a staggering 98% of investors have established a transition investment aim for their portfolios, while three-quarters of institutional investors have committed to net zero objectives.

BlackRock is globally renowned as a monumental investment manager, controlling assets and funds that traverse various sectors and regions. With a critical focus on identifying and leveraging “mega forces” that promise to reconfigure profitability and capital allocations across economies and sectors, BlackRock consistently seeks to align investment opportunities with emergent economic and socio-environmental trends.

The newly-minted Climate Transition-Focused Private Debt Fund by BlackRock, launched within its Global Private Debt platform, predominantly zeroes in on European and U.S. middle market direct lending. The fund’s quintessential goal is to propel borrowers’ climate transition agendas by providing indispensable support and resources. Through the deployment of a proprietary Climate Transition Rating Framework, the fund ensures borrower selection encapsulates companies at varied stages of transitioning to net zero emissions.

This fund not only focusses on direct lending but also employs a meticulous selection criterion centred on the climate transition attributes of borrowers. Thus, investments are strategically channelled towards accelerating the climate transition agenda, offering a holistic and supportive approach towards achieving a low-carbon economy.

The fund, while emphasising climate transition, also pivots on a cardinal principle of BlackRock – identifying and capitalising on “mega forces” that promise to recalibrate profitability and economic structures globally. These forces, particularly the transition to a low-carbon economy, are anticipated to be pivotal in spurring investment opportunities and capital reallocations across various sectors.

BlackRock chief investment officer and global head of private debt James Keenan 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.”

BlackRock portfolio manager and sustainability investing lead Sonia Rocher 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.”

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