BlackRock to establish perpetual infrastructure strategy

BlackRock announced it will establish a perpetual infrastructure strategy that will seek to partner with leading infrastructure businesses over the long term to help drive the global energy transition.

 

Building on the broad capabilities of BlackRock’s longstanding infrastructure platform, it will seek to make lasting investments in core assets and aim to create resilient, inflation-linked returns for investors, while creating growth in the real economy.

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A bird’s eye view of a tractor trailer driving up the coastline

Infrastructure for greener economies

The shift toward a green economy is creating a step change across all infrastructure sectors today, opening attractive investment opportunities in several areas. This perpetual infrastructure strategy will pursue investments in megatrends of energy transition and energy security, as well as digital and community infrastructure, sustainable mobility, and the circular economy.

The strategy will seek to deploy capital into fully integrated businesses such as utilities and end-to-end renewable energy infrastructure players, as well as assets such as data centers, grid digitization technologies, battery storage systems, and natural gas storage and transportation facilities, where adaptable to incorporate hydrogen. Over half of the strategy will be allocated to Europe initially, becoming increasingly global over the decades to come.

BlackRock intends to launch underlying open-ended investment vehicles and will be seeking founding partners in the second half of 2022.

Kristen Weldon

While momentum continues to build around decarbonization, getting there is another matter. The world has primarily focused on shifting to renewable energy sources like wind and solar, but decarbonizing the manufacturing, agriculture, and transportation sectors is just as important.

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Innovations like carbon capture, hydrogen technologies, and advanced batteries will make vital contributions to emission reductions, particularly when you think about decarbonizing the harder to abate sectors. Energy security has also joined the energy transition as a top global priority.

Following the energy shocks caused by the war in Ukraine, countries around the world are re-evaluating their energy supply sources. This is accelerating the transition, especially in Europe, and opening the door to new opportunities.

The bottom line is the transition to net 0 will not happen overnight or in a straight line. It will require nothing short of a complete transformation of the global energy system. We will need to pass through many shades of brown to shades of green. The intersection of infrastructure and sustainability will be key to building a greener, cleaner future creating a hundreds plus trillion-dollar investment opportunity in the next three decades.

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The intersection of infrastructure and sustainability

Why is the intersection of infrastructure and sustainability critical to the energy transition? Kristen Weldon, Global Head of BlackRock Alternative Investors Sustainable Investing explains on this episode of the BlackRock Bottom Line.