BlackRock, the New York-listed investment manager with $113 billion of alternative assets under management, is launching a London-based European infrastructure debt investment team made up of Blackstone veterans, the firm announced today. The move follows an announcement earlier this year that the firm would also launch a real estate debt product.
Phillippe Benaroya, Chris Wrenn and Gilles Lengaigne – who all worked together at Blackstone/GSE, Blackstone’s credit-oriented alternative assets unit, for more than a decade – will form the backbone of the new team, which will target investment grade infrastructure debt across transportation, social infrastructure and regulated utilities.
BlackRock says the new European debt team is a response “to institutional client demand to channel capital into new build infrastructure projects and secondary loan investments as they search for increased yield in a low interest rate environment”. The team will initially serve investors, such as insurance companies, that are already clients of BlackRock’s financial institutions group.
“Solvency II is proving a major catalyst for insurers in this new world of market volatility and low interest rates as they search for alternative sources of income to meet their liabilities. Research undertaken by BlackRock earlier this year suggests insurers may look to increase their allocation towards alternative asset classes to achieve this. The characteristics of infrastructure debt make it an ideal strategy,” noted David Lomas, head of BlackRock’s global financial institutions group.
Benaroya and Wrenn will join BlackRock as managing directors and co-heads of European infrastructure debt. The former joins from Blackstone/GSO and brings 18 years of infrastructure experience. The latter comes from Financial Security Assurance and has 25 years of infrastructure and structured finance experience under his belt.
Lengaigne will take up the post of director in European infrastructure debt. Prior to BlackRock he was a principal of Blackstone/GSO’s infrastructure debt group, with 10 years of infrastructure and structured finance experience.
In the summer, BlackRock acquired Swiss Re Private Equity Partners, the European private equity and infrastructure fund of funds outfit, for an undisclosed amount. The acquisition was meant to extend BlackRock’s capabilities into infrastructure investing, among other reasons.