BlackRock hits $1.1bn first close on fifth infra solutions fund – exclusive

BlackRock has reached a first close on its fifth global infrastructure solutions fund, targeting $2.5 billion, Infrastructure Investor understands.

The firm is believed to have garnered about $1.1 billion from over 25 investors, having first launched the fund in June.

The solutions strategy sees BlackRock invest across primary fund commitments, secondaries and co-investments. LPs have an option to invest in a balanced feeder fund comprised of primaries, secondaries and co-investments or a dedicated feed just for co-investments. However, for the first time in the vintage’s history, a feeder just for secondaries has also been opened up, a source told Infrastructure Investor.

So far, a source said, about 40 percent of the funds raised has been committed across 21 investments that have been closed across the three strategies. A majority of deals have taken place in the Americas and Europe, and across sectors such as digital, power and utilities, and transport and logistics.

GIS 5 is understood to have agreed co-investments with the likes of DigitalBridge and KKR, as well as alongside more mid-market managers such as Arcus, Digital Transformation Capital Partners, Northleaf and Partners Group.

The co-investment portfolio is believed to include four data centre platforms around the world, a solar and storage company in North America as well as a submetering company and cold storage company in Europe.

BlackRock declined to comment for this story.

Historically, funds in the series have been solely euro-denominated, with the predecessor fund having held a final close in January 2022 on €1.4 billion, above its initial target of €800 million. For GIS 5, though, investors have the option of a US dollar-denominated sleeve as BlackRock bids to attract LPs from the Americas. It’s believed that about 75 percent of the LPs at first close are from Europe.

The GIS strategy is led by Zurich-based managing director Serge Lauper, who joined BlackRock in 2012 from Swiss Re.

In 2023, infrastructure secondaries saw $14 billion in deal volume, according to a report published by BlackRock in September. Those volumes should reach $25 billion by 2027, BlackRock noted.

The report also revealed that before 2023, pricing of infrastructure secondaries remained close to par with relatively narrow average discounts. However, in 2023, pricing softened to a 7 percent discount, with an 8 percent discount noted by BlackRock in H1 2024.

BlackRock, though, is also eyeing opportunities beyond traditional GP- and LP-led secondary transactions.

“Slower fundraising equals a buyer’s market, which is creating opportunities for us to partner with GPs, providing structured solutions,” Jérôme Leyvigne, head of infrastructure secondaries, told Infrastructure Investor’s recent secondaries roundtable.

“For our current Global Infrastructure Secondaries fund, that might lead to LP-led secondaries transactions or continuation vehicles, but it might also mean a broader conversation around the challenges the manager is facing and how we can help by providing constructive capital. Only investors with deep knowledge and understanding of both secondaries and infrastructure can make that happen,” he said.