James and Kathryn Murdoch raise $ 250 million in BlackRock climate fundraising

James and Kathryn Murdoch’s nonprofit foundation is part of a consortium of investors that has committed $ 250 million to a climate finance fund BlackRock which will target emerging markets.

The group of ten members involved in the fundraiser includes institutional investors, governments and a philanthropic vehicle driven by Jeremy Grantham, the veteran stockbroker.

BlackRock is committed to investing capital in green energy infrastructure, including renewable energy generation and very low-emission power grids.

Fundraising was driven by expectations of doubling energy demand in developing countries by 2050. To help facilitate the global transition to a mid-century net carbon economy, it is projected that there will be countries in Asia, Central and Latin America and Africa require significant investments in renewable energy projects.

The fund aims to close at $ 500 million next summer and plans to invest in projects over a three- to four-year period, with the expectation of “low double-digit returns” for investors over the next seven years. following years, said David Giordano, world leader in BlackRock Renewable Power.

Fundraising highlights how large asset managers seek to take advantage of the transition to cleaner energy by investing in physical assets at a time when many public market values ​​are trading at valuations that extend to most measures.

“In a world where traded asset prices are so inflated, what we find compelling is the opportunity to invest in low-risk projects in relation to projected cash flows,” said Ramsay Ravenel, chief investment officer. of the Grantham Foundation. “We see healthy growth in clean energy investment opportunities in emerging markets.”

Fundraising includes $ 112.5 million in “catalytic capital,” which shows the risks associated with long-term investment projects in emerging markets. The catalytic stretch will absorb the losses associated with the investments made by the fund and this cushion is designed to encourage the participation of other investors.

Contributors to the catalytic capital bracket include the French Development Agency, the German development bank KfW, the Japanese international cooperation bank, Grantham Environmental Trust and the Quadrivium Foundation.

Kathryn Murdoch, co-founder of Quadrivium, said the catalyst would “drive much bigger players” to invest in “climate technology solutions” with the “global scale and ambition needed to make a real impact.”

Ravenel said some investors in emerging markets have doubts about clean energy projects, while others have broader reservations about exposure to MS. “Our hope is to encourage institutional investors not to be left out,” he added, “We are betting that our insurance premium will not be called up.”

Projects in Vietnam and Malaysia are possible initial targets for deployment, said Edwin Conway, global head of BlackRock Alternative Investors.

The list of institutional investors who have made commitments to the fund includes Dai-ichi Life Insurance, a leading European pension fund, Standard Chartered Bank and Mitsubishi UFJ Financial Group, according to BlackRock.

Limiting the fund to $ 500 million reflects a specific focus on carbon-free infrastructure projects, Giordano said. “We want the fund to be agile and selective in raising capital.” He added that “these are long-term infrastructure projects that are basic elements of the portfolio and offer investors a diversified source of return.”

BlackRock’s real-estate team manages about $ 12 billion in private equity and committed funds for renewable energy platforms.

The new fund follows a boost from the Rockefeller and Ikea foundations last month to commit $ 500 million each venture capital with the aim of encouraging additional funding from international development agencies.