BlackRock has held the first close of its new high-yield infrastructure debt fund, Global Infrastructure Debt II, with $1.3bn in capital commitments, which represents more than half of the funds’ $2.5bn target, according to a report by Infrastructure Investor.
Fundraising for the new fund launched earlier this year with the new vehicle following the success of BlackRock’s first venture into the high-yield infrastructure debt market, whjich closed in 2021 with $1.7bn – far in excess of its initial $500m target.
The report cites Jeetu Balchandani, BlackRock’s global head of infrastructure debt as saying that GID II attracted a strong re-commitment from investors, with an 80% re-up rate.
The fund, which is targeting gross returns of 10-12%, will focus on investments within the OECD countries. A key difference between GID II and its predecessor is the extended fund term of seven years rather than six. This adjustment is designed to provide the investment team with more flexibility, aligning with the typical five to seven-year tenors seen in the high-yield market.
The fund has already established a seed portfolio of $600m in loans, targeting sectors such as communications, energy, power, and transportation. This initial portfolio was partly built through an agreement with Santander, announced in April.
Currently, BlackRock manages $24.4bn in infrastructure debt assets, with $19.7bn in investment-grade commitments and $4.7bn in the high-yield space.
