BlackRock to focus on secondaries, renewables and credit

The world's biggest asset manager in recent weeks amassed nearly $8bn across its debut secondaries fund and its third renewable energy fund.

BlackRock will zero in on its credit, secondaries and renewables strategies over the next 12 to 18 months, according to its president Rob Kapito.

Speaking on the asset management giant’s first-quarter 2021 earnings call on Thursday, Kapito said: “Our current focus will be on credit, which is where our clients are looking to invest…and sustainable, we are looking at renewable energy.”

Kapito noted that the firm has had a focus on its alternative business over the last several years. “While we haven’t raised $20 billion in one fund, we’ve raised $2 billion in 10 funds and those continue to grow.”

The world’s latest asset manager last month gathered more than $3 billion for its debut Secondaries & Liquidity Solutions Fund. It has also raised at least $3.4 billion for its direct private equity strategy, Long Term Private Capital, and this month held the final close on its third global renewables fund on $4.8 billion, almost doubling its $2.5 billion target.

“Seeing how the PE market evolves and where our clients can earn alpha drove our secondaries and liquidation fund as some of the older vintages come due from some of the stable PE companies that are looking to start new funds, but liquidate what is left in the older funds,” Kapito said.

“What we are trying to do is really have a very careful eye on where we think the next value chain is, and can that be described both in a liquid form and an alternatives fund.”

Kapito also noted that the firm’s general theme is “alternatives are going to become less alternative”.

“We are very focused on how that compares with what our team thinks about sustainability and ESG going forward and how we combine the two.”

This week the firm said it had formed a tie-up with Singapore state investor Temasek to launch Decarbonization Partners, a series of late-stage venture capital and early-growth private equity funds to invest in “decarbonisation solutions”. The fund is seeking $1 billion, and the pair will invest a combined $600 million.

Kapito also noted that the firm is closely following the proposed $2.3 trillion infrastructure bill in the US. “Many of our clients would like long-duration type assets…so we will probably go in that direction a bit more.”