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BlackRock raises £475m for largest renewable power fund in the U.K.

by Jody Barhanovich

BlackRock Real Assets has raised £475 million ($612 million) of additional client commitments for its Renewable Income U.K. fund, now the largest U.K. renewable power fund, as part of its third re-opening.

The fund reached over £1.1 billion ($1.4 billion) of total commitments, reflecting strong demand from U.K. pension funds for long-term income from the renewable power asset class.

The fundraising has been underpinned by strong relationships with existing clients who represented 70 percent of the recent capital raising. The fund, which aims to provide investors with immediate ownership in a cash-generating portfolio of renewable power assets, has already invested more than £600 million ($781.4 million) in 40 wind and solar projects in the United Kingdom.

“BlackRock continues to see the United Kingdom as an attractive market for wind and solar assets, and globally manages more than $4.8 billion of equity assets in the renewable power sector,” said Rory O’Connor, head of European renewables investment for BlackRock Real Assets and manager of the fund.

According to BlackRock’s 2017 Global Rebalancing Survey, 63 percent of U.K. institutional investors intend to increase exposure to real assets. As institutional investors seek to generate sufficient return in the low-return environment, many are turning to infrastructure and renewable energy assets to meet long-dated liabilities. Renewable power is now one of the most active sectors for deal flow in the growing infrastructure asset class.

BlackRock was one of the early movers in identifying renewables as an attractive global fundamental growth story for infrastructure investors, said Charlie Reid, portfolio manager on the BlackRock renewable power investment team.

As of June 30, 2017, BlackRock has $5.7 trillion in assets under management and currently has $30 billion in invested and committed real estate and infrastructure assets and capital through its funds.

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