BlackRock has announced the final close of its Diversified Private Debt Fund (DPD) with a total capital raise of GBP1.7 billion, underlining the growing attraction of private debt to pension schemes and other institutional investors.
The DPD offering was designed by BlackRock in partnership with UK investment consultants specifically as a vehicle for UK pension schemes to address their needs for income and diversification across a variety of global private debt markets.
The fund was developed to provide exposure to a diversified mix of standalone, scaled private debt strategies through a single solution. According to the firm, this simplified governance structure combines bottom-up selection with top-down strategy allocation and the flexibility to capitalise on market dynamics.
BlackRock says private debt continues to offer the potential for attractive returns, stable income and diversification benefits for investors seeking portfolio resilience during periods of higher market volatility and inflation.
Managed by James Keenan, chief investment officer and global head of credit at BlackRock Alternative Investors, the fund leverages BlackRock’s more than 20 years of experience in private debt to invest across a range of US and European direct lending, US and European real estate debt, and global opportunistic strategies – which together have more than GBP30 billion of capital deployed across multiple vintages.
DPD has had a strong deployment pace with 60 per cent of capital invested across 164 investments to date and is on track to be fully deployed by early next year, well ahead of target.
“We are delighted with the successful final close of our multi-private debt fund,” said Keenan. “We’re seeing strong investor desire for income and interest in diversified allocations across the credit spectrum. This strategy optimises global exposure across private debt and real estate debt markets through a single strategy.”
Anne Parthiot-Mons, co-global head of BlackRock’s global consultant relations business and head of the firm’s continental European institutional client business, added: “DPD provides pensions schemes with the potential for yield premium and strong income stream. Our investment approach allows us to assess relative value across asset type and geography and tilt the portfolio towards the most attractive segments.”
Ajith Nair, head of asset class and manager research at pensions advisory firm Isio, said: “DPD is attractive for our clients not only because it provides diversified access across geographies and sub-asset classes within private credit, but also because it’s a low-governance, one-stop-shop solution.”
He added: “Our research at Isio goes further than just rating products. We help drive innovation and product design when we see a gap in the market and a need for our clients. DPD is a good example of our focus on such innovation, and we are happy to have collaborated with BlackRock from the initial design stage.”
