Stockholm (NordSIP) – On Thursday, April 16th, BlackRock announced the launch of the BlackRock Global Impact Fund, a new active equity impact strategy. The new fund allows investors to target companies helping to address significant world challenges, not least of which the fight to stem the spread of COVID19. The launch of this new fund follows BlackRock’s much-delayed embrace of sustainability at the start of 2020.
The fund achieves impact by investing in companies that contribute to the United Nations Sustainable Development Goals (SDGs) and targets. Alongside the impact goals, the Fund seeks to maximise long-term total return and to outperform the MSCI All Country World Index (ACWI). The portfolio includes companies whose activities increase access to quality education and affordable housing and advance healthcare innovation to help with societal challenges such as the current COVID-19 pandemic, among other sustainable themes. The Fund is denominated in US Dollars and available for investors located across Europe.
BlackRock’s Active Equities Impact Investing team manages the fund and intends to run a low-turnover, long-term buy and hold concentrated portfolio strategy and engage with companies to drive improvement towards impact outcomes, alongside long-term value creation. The fund uses the World Bank’s IFC Operating Principles to ensure impact considerations are integrated throughout the investment lifecycle.
The Active Equities Impact Investing at BlackRock is headed by Eric Rice, who joined BlackRock in October 2019 as Portfolio Manager of the BlackRock Global Impact Fund. Rice has 30 years of industry experience, most recently exclusively developing and managing impact strategies, and including his prior experience working for the World Bank as a development economist and as a US diplomat in Rwanda.
“Impact investing is becoming more and more attractive as investors increasingly require their investment targets to advance their sustainability objectives,” said Rice. “Launching the Fund during the COVID-19 pandemic has further highlighted the important role companies play in society. COVID-19 is one of the greatest societal challenges the world faces right now, and we see impact investing playing a meaningful role in how we overcome it. Capital from the fund will be put toward the search for alpha by investing in companies focused on medical diagnostic tools and vaccines to combat the crisis, as well as crisis mass notification systems and microloans, amongst others.”
According to BlackRock, to achieve its impact objectives, Rice’s team has set impact criteria for the portfolio companies. From a Materiality perspective, only companies where a majority of revenues or business activity advances one or more of the SDGs or targets will be chosen. Companies also have to provide some Additionality, defined as delivering a new technology or innovation to market, serving an underserved population, or operating in an unaddressed market. Finally, the team is also focused on Measurability, and ensuring that that the impact must be quantifiable.
“Eric joined BlackRock with a strong track record in developing alpha-seeking impact strategies, and his expertise will lead our impact investing efforts during this challenging time and beyond,” Rachel Lord, Head of Europe, Middle East and Africa for BlackRock commented. “While launching the Global Impact Fund during a global pandemic is coincidental, it does highlight that the opportunity inherent in investing in companies committed to doing good is enduring, and is of increasing relevance to the world today.”