BlackRock: UK’s largest renewables fund passes £1bn mark

The world's largest investor has raised the largest fund for renewable power generation in the UK, totalling £1.1bn in commitments, with more than £600m already funnelled into 40 UK solar and windfarm projects.

BlackRock’s Renewable Income fund passed the £1bn barrier after raising £475m in the third round of commitments, the majority of which came from British pension funds.

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

The company noted that renewable generation is one of the “most active sectors for dealflow” in relation to infrastructure project funding. In fact, BlackRock’s Global Rebalancing Survey for 2017 suggests that 63% of UK institutional investors intend to increase exposure to assets in the coming years.

The latest round of funding commitments was built on existing relations with clients, who accounted for 70% of the added £475m. According to BlackRock, these commitments make the Renewable Income fund the largest of its kind in the UK.

BlackRock’s rolling

BlackRock, which is accountable for assets totalling £4.2trn, has accelerated its commitment towards renewables and climate mitigation in 2017. The firm has established new investor guidance that could vote out high-level directors from companies that are failing to mitigate climate-related risks posed to individual firms.

The guidance warned that companies failing to adopt climate risk awareness strategies could be subjected to “material economic disadvantage”, which would likely impact shareholders. The firm claims that, if these disadvantages aren’t addressed, it will consider voting against the re-election of certain board directors.

Just one week later, BlackRock unveiled its Green Bond Index fund, following a heightened investor demand for ESG fixed income securities and products. The Bonds will mirror investment performances equal to that of the Bloomberg Barclays MSCI Global Green Bond Index.

Actions by BlackRock have been mirrored throughout the financial sector. A report from April revealed that 60% of the world’s biggest investors are taking steps to protect their portfolios.

The movement is being driven by fears in the financial sector that the next economic crash will be climate-related.

Matt Mace

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