black rock secured over $800 million in initial commitments toward its $1 billion goal for the BlackRock Impact Opportunities Fund. This new fund, the first multi-alternative strategy of its kind, is already beginning to invest in businesses and projects owned, led by, or serving people of color, with a particular focus on Black, Latina, and Native American communities in the States. -United. .
Edwin Conway, Global Head of BlackRock Alternative Investors, said, “Black, Latinx and Native American people face a number of systemic barriers to accessing the market and acquiring the capital needed to drive economic growth and wealth creation in their communities. The BlackRock Impact Opportunities Fund aspires to change the way institutional capital flows to communities of color, and is just one step between BlackRock and its clients and partners in capturing this significant investment opportunity.
Launched in 2021, this yield-seeking fund seeks to uncover attractive investment opportunities in undercapitalized businesses and communities ready to grow. It takes a new approach to social impact by making direct investments in private equity, private credit, infrastructure, real estate and other niche asset classes – using a wide range of tools seeking to create collective wealth for the companies and communities in which it invests, and to generate returns for investors in the fund. BlackRock Impact Opportunities Fund investments focus on themes such as housing, financial inclusion, education, healthcare, inclusive transition and digital connectivity. To date, a large investor base including leading corporations, pension funds, insurers, endowments, foundations and family offices have committed to the first fund.
The fund is led by a dedicated and experienced team of diverse portfolio managers who rely on BlackRock Alternative Investors’ $330 billion private markets platform, as well as the leverage power of BlackRock, to find and execute investment opportunities.
Pam Chan, Chief Investment Officer and Global Head of BlackRock’s Alternative Solutions Group, said, “To create collective wealth for these communities and our customers, we combine our singular impact focus – improving the economic outcomes of communities of color under capitalized – with a flexible and multi-alternative investment approach. In doing so, we seek to deliver differentiated returns alongside impact and show that investors can do well and do good.
To date, the fund has assessed a strong pipeline of opportunities and completed three investments:
– In May 2022, the fund partnered with Eastwood Capital Partners, a black-owned sponsor, and Retro Fitness to invest in the development of up to 70 fitness franchises in the Dallas, Houston and South regions -East Florida. The investment aims to make affordable exercise, health and fitness more accessible to communities of color to help address disparities in the social determinants of health. Additionally, most budget gyms in the U.S. fitness industry are showing a solid rebound in revenue from pandemic lows in 2020 and early 2021 as pandemic-related restrictions ease.
– In February 2022, the fund partnered with BRP Companies, a black-owned and operated real estate company with a majority diverse employee base, to invest in Arboretum, a 292-unit garden-style rental community to be built in Farmingville, New York, a constrained multifamily rental market in Long Island. . BRP has hired several corporate-owned businesses as sellers of the project and Basis Investment Group, a black and women-owned commercial real estate investment firm, is acting as the preferred equity investor. This investment allows BRP Companies to expand beyond its historical focus of urban housing development and highlights its strong capabilities and long-standing track record, including being New York’s third most active real estate developer. in 2020.
– In September 2021, the fund invested in Tricolor, a fintech company with a mostly diverse employee base that leverages proprietary AI-powered technology to sell and provide financing for high-quality used vehicles and affordable to underserved Latinx customers. The US Latinx market is growing 8.6%, faster than China or India, and equals the eighth largest economy in the world. Tricolor is headquartered in Dallas, Texas and operates 50 dealerships in Arizona, California, Nevada and Texas. The company won the 2021 LendIt Fintech Industry Award for Excellence in Financial Inclusion and in April became the first social bond issuer in auto finance. Tricolor is also certified by the US Treasury Department as a Community Development Financial Institution (CDFI). CDFIs are institutions focused on expanding economic opportunity in low-income communities by providing access to financial products and services.
Douglas McNeely, Head of BlackRock’s Strategic Client Coverage Group, said, “BlackRock believes it is essential that we work with our clients and the broader financial services industry to identify opportunities that drive real and lasting impact in communities. that we serve. Through this fund, we leverage the power of the BlackRock platform and the active partnership of our clients to identify strong investment opportunities that match the philosophy of our clients and partners.
Aaron Anderson, Senior Vice President and Treasurer of PayPal, said, “It is through catalytic funds like these that we can create pathways to economic opportunity for underserved communities. Building an inclusive economy requires collective action and we are proud to join BlackRock and this premier group of investors in driving sustained economic growth and equity.
Jayson BronchettiChief Investment Officer and Chief Risk Officer, Lincoln Financial Group, said: “While we recognize that issues of racial inequality will not be resolved overnight, direct investments in private asset classes in communities are an important step in the right direction.Our partnership with the BlackRock Impact Opportunities Fund aligns with our responsible investing efforts to help deliver both differentiated returns and measurable impact to undercapitalized communities. .
Victor Terry, Chief Diversity Officer, State Farm®, said, “State Farm is committed to building safer, stronger and better educated communities. We foster a diverse and inclusive culture within our company, in our communities and in all the organizations with which we do business. Investing in the BlackRock Impact Opportunities Fund offers the opportunity to make a connection to help more people experience financial wellness. Our aspirations align as we both continue to look for ways to invest in the future and support our local communities.
Carlos Rangel, Vice President and Chief Investment Officer, WK Kellogg Foundation, commented: “The BlackRock Impact Opportunities Fund is poised to make a huge impact on the movement to advance racial equity in capital markets through its influence and its mission to raise much-needed capital for communities of Color. We learned from the racial equity business case that the United States should achieve a $2.7 trillion increase in GDP by closing the racial equity gap; this figure could rise to $8 trillion by 2050. We are proud to support this bold effort to reap these gains and strengthen our long-standing relationship with BlackRock.