BLACKROCK announced April 15 that its Global Energy & Power Infrastructure Fund (GEPIF) has achieved a US$5.1 billion final close of Global Energy & Power Infrastructure Fund III (GEPIF III or the Fund), making it the largest alternative investment fundraise in BlackRock history. The final close value also exceeded both the original Fund target of US$3.5 billion and the original hard cap of US$4.5 billion.
“Investors are looking to build resilience into their portfolios and ballast against equity market shocks by increasing their allocations to less correlated exposures in private markets,” says Edwin Conway, global head of BlackRock Alternative Investors. “Investor demand for this fundraise reinforces our belief that infrastructure will play an increasingly important role in portfolio construction moving forward.”
The Fund’s commitments include investment mandates from over 50 institutional investors, including public and private pension funds, sovereign wealth funds, foundations, insurance companies and non-profit organizations across the US, Europe, Asia and the Middle East.
Over 70% of the commitments are from investors in the prior fund, which reflects investors’ high-level of confidence in the GEPIF team and its expertise in the space.
Building on the investment strategy of its predecessor funds, GEPIF III aims to generate strong uncorrelated returns from investments in high-quality and essential energy infrastructure businesses and assets. These companies will generally have long-term contracts and visible revenue streams from strong counterparties and seek to provide robust dividend yields to investors.
The investments are diversified geographically and by energy sub-sectors, which primarily consist of: 1) the power sector, including electric power generated from renewable sources (solar, wind, hydro and waste-to-energy) and from natural gas, while excluding coal-generated power; 2) the midstream sector, including energy transportation and storage; and 3) the utility sector.
“The success of the fundraise reflects the search for diversified returns in a yield-starved environment, which continues to be front of mind for investors,” says Mark Florian, head of the Global Energy & Power Infrastructure team within BlackRock Real Assets.
BlackRock Alternative Investors is designed to serve investors as they seek outperformance in real estate, infrastructure, private equity, credit, hedge funds and alternative solutions.