BlackRock has confirmed that nine UK local government pensions schemes (LGPs) invested a total of USD605 million in the final fundraise for its Global Renewable Power Fund III (GRP III). This commitment demonstrates the continued focus on sustainable investing among institutional investors.
GRP III invests in global climate infrastructure assets, primarily in renewable power generation, across the Americas, Europe and Asia. It seeks to deliver attractive risk-adjusted returns with positive and measurable environmental and social impact by investing across the spectrum of renewable power and supporting infrastructure globally, including energy storage, distribution and electrified transport.
In contrast to most UK Defined Benefit pension schemes, LGPs remain open to new members, and as such have a more open-ended time horizon and requirement for exposure to growth and income assets. Via GRP III, scheme members will be exposed to infrastructure assets facilitating the transition to a low-carbon economy, with the Fund already investing in transformative projects, including onshore wind in Europe, solar in Asia, and distributed solar generation in the US. This is designed to help LGPS meet the ongoing growth, income and sustainability needs of their members. The GRP III fund is categorised as Article 9 in line with the European Sustainable Finance Disclosure Regulation.
Gavin Lewis, head of UK LGPS at BlackRock, says: “As the pension landscape continues to evolve, the allocation to investments aligned with schemes’ sustainable investing goals is quickly gaining momentum. For LGPS, higher-yielding growth assets, such as renewable power infrastructure, represent an attractive opportunity aligned with both financial and environmental objectives. We are thrilled with the interest from LGPS in GRP III and will continue to work with trustees to help them build robust portfolios with a positive environmental and social impact.”
Freek Spoorenberg, head of Product Strategy for Infrastructure Equity at BlackRock, adds: “Global Renewable Power III has actively begun investing this capital on behalf of the nine LGPS across climate infrastructure projects in Europe, North America and Asia Pacific. Since its final close in March 2021, the Fund has committed approximately one third of its capital to onshore wind in Europe, distributed solar generation in the US, and solar and offshore wind in Asia. We are also seeing attractive opportunities in adjacent sectors such as electric vehicle charging and transmission & storage.”
