BlackRock has raised more than £1.1 billion ($1.4
billion) for its Renewable Income U.K. fund, making it
Britains largest investment pool targeting renewable
The firm said Wednesday it attracted $612 million of new
commitments for the fund, seeing strong demand from
U.K. pensions turning to infrastructure and renewable energy
assets to meet long-dated liabilities.
Asset managers are witnessing increased global demand for sustainable energy investments after the
2015 Paris Agreement underscored the commitment of major
nations to the development of renewables and related
technology, according to a Preqin report last month. The financial data provider cited the BBC
Pension Trust as an investor in the BlackRock fund, with
similar pools attracting investors including South Koreas
National Pension Service and the Church Pension Group in New
There is more interest around climate change
strategies, said Andy Howard, head of sustainable research
at Schroders, a London-based asset manager. It is
becoming clear that, unlike a few years ago, renewables are
economically viable in their own right, without the requirement
for political support.
Renewable energy power has become one of the most
active sectors for deal flow in the growing
infrastructure asset class, BlackRock said, noting that
its renewable fund has already invested more than £600
million in 40 wind and solar projects in the U.K. The New
York-based firm, which is the worlds largest asset
manager, found that 63 percent of U.K. investors that it polled
in November for its 2017 Global Rebalancing Survey planned to
increase exposure to real assets.
Beyond diversification, renewable funds can help offset
challenges that arise in portfolios from more traditional
energy investments, according Schroderss Howard.
Renewables-focused funds raised about $5 billion this year
through April, exceeding fundraising for conventional energy,
according to Preqin.
An April research report commissioned by the United Nations
Environment Programmes economy division found that
institutional investors made a record $2.8 billion of direct
equity commitments to European renewable energy projects in
2016, while the issuance of green bonds to finance
environmental projects, including renewable energy, rose 99
percent to $95.1 billion last year.
Commenting on record acquisition activity in the clean power
sector, Udo Steffens, president of the Frankfurt
School of Finance and Management, said in the UN report that
investor hunger for existing wind and solar farms is a
strong signal for the world to move to renewables.