BlackRock launches Climate Transition-Oriented Private Debt Fund

BlackRock announced today the launch of a Climate Transition-Oriented Private Debt Fund (“CPD” or the “Fund”) within its Global Private Debt platform. The Fund brings together BlackRock’s transition investing expertise and Global Private Debt platform to provide a single-entry point to a diversified and high-quality private debt portfolio.

The Fund leverages investment capabilities across BlackRock’s Global Private Debt platform to provide exposure to performing middle market companies and assets across a range of defensive sectors via the allocation to direct lending, opportunistic, venture capital and real asset debt. CPD is predominately focused on European and U.S. middle market direct lending where fund investments can help accelerate borrowers’ climate transition agenda by providing support and resources.

Using a proprietary Climate Transition Rating Framework, the Fund finances companies at a variety of stages of transitioning to net zero emissions and applies climate transition selection criteria so that the borrowers demonstrate satisfactory climate transition characteristics. During the life of the investments, the team will also actively engage with the companies it finances to support the implementation and delivery of their carbon reporting and decarbonization targets, because it is the fund’s investment team’s conviction that companies that incorporate smart climate planning to evolve their business models will demonstrate further resilience and improved credit quality in the long run.

The portfolio will be managed by a dedicated team of private debt investors, as well as sustainability and transition investing specialists from across the firm. Today, BlackRock has a $100+ billion transition investing1 platform. The platform offers clients choice across index, active, and private markets to meet their needs, and is powered by proprietary research, global scale, and 600+ dedicated sustainable and transition professionals across the firm.

The strategy responds to client demand for transition-oriented solutions: in BlackRock’s Global Transition Investor Survey, 98% of investors have set a transition investment objective for their portfolios and 75% of institutional investors indicated that they have net zero objectives. The transition to a low-carbon economy is one of the five ‘mega forces’ – or structural changes – that are expected to create significant profitability shifts across economies and sectors, involving a massive reallocation of capital, according to BlackRock’s recent research. These shifts are a result of competing economic catalysts and barriers – shaped by policy, technology and consumer and investor preferences.

“The new fund is designed to respond to client demand for transition-oriented private debt strategies by investing in mid-sized firms with carbon emissions reduction goals or companies providing climate solutions. It supports them in their carbon reporting and achievement of their roadmap to reduce emissions. We are pleased to offer investors all the benefits of a traditional private debt portfolio with the additional selectivity to consider the transition.”

Sonia Rocher, Portfolio Manager and Sustainability Investing Lead for BlackRock’s Global Private Debt platform

“We are harnessing the breadth and experience of our global platform to deliver a quality credit portfolio that focuses on income. The strategy focuses on the transition to a low-carbon economy as one of several mega forces driving investment opportunities. We look forward to continuing to develop, refine, and expand our private debt and transition investing platforms.”

James Keenan, Chief Investment Officer and Global Head of Private Debt for BlackRock