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BlackRock Impact Opportunities Fund Targets $1 Billion to Invest in Communities of Color Across the U.S.

BLK

First-of-its-kind multi-alternatives fund has raised more than $800 million to date to invest in companies and projects owned, led by, or serving Black, Latinx, and Native American communities

Initial investors include Anthem, Costco Wholesale, Johnson Controls, Lincoln Financial Group, PayPal, State Farm, and W.K. Kellogg Foundation, demonstrating broad-based institutional demand for differentiated investment opportunities in undercapitalized communities

BlackRock has secured more than $800 million in initial commitments toward its $1 billion target for the BlackRock Impact Opportunities Fund. This new fund, the first multi-alternatives 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, Latinx, and Native American communities in the United States.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220511005327/en/

Seated (L to R): Joseph Acevedo, Ladell Robbins, Pam Chan, Douglas McNeely, Derrick Weatherspoon; Standing (L to R): Haley Schaffer, Susie Qian, Brian Mwarania, Aarthi Sowrirajan, Brian Grossman (Photo: BlackRock)

Seated (L to R): Joseph Acevedo, Ladell Robbins, Pam Chan, Douglas McNeely, Derrick Weatherspoon; Standing (L to R): Haley Schaffer, Susie Qian, Brian Mwarania, Aarthi Sowrirajan, Brian Grossman (Photo: BlackRock)

Edwin Conway, Global Head of BlackRock Alternative Investors, commented, “Black, Latinx, and Native American people face a number of systemic barriers in accessing the market and acquiring the capital necessary 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 BlackRock is taking with our clients and partners to address this significant investment opportunity.”

Launched in 2021, this return-seeking fund looks to uncover compelling investment opportunities in undercapitalized companies and communities that are poised for growth. It takes a novel approach to social impact by making direct investments across 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 businesses and communities in which it invests, and to generate returns for the fund’s investors. The BlackRock Impact Opportunities Fund’s investments focus on themes such as housing, financial inclusion, education, healthcare, inclusive transition, and digital connectivity. To date, a broad investor base including leading corporations, pension funds, insurers, endowments, foundations, and family offices have committed to the debut fund.

The fund is led by a dedicated and experienced team of diverse portfolio managers that leverages BlackRock Alternative Investors’ $330 billion private markets platform, as well as the convening power of BlackRock, to source and execute investment opportunities.

Pam Chan, Chief Investment Officer and Global Head of BlackRock’s Alternative Solutions Group, commented, “To create collective wealth for these communities and our clients, we combine our singular impact objective – to improve economic outcomes for undercapitalized communities of color – with a flexible, 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 evaluated a robust 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 Southeast Florida areas. The investment seeks to make affordable exercise, health and fitness more accessible to communities of color to help address disparities in social determinants of health. Moreover, most budget gyms in the U.S. fitness industry are demonstrating a robust revenue rebound from 2020 and early 2021 pandemic-lows as pandemic-related restrictions ease.1
  • In February 2022, the fund partnered with BRP Companies, a Black-owned and operated real estate firm with a majority-diverse employee base, to invest in Arboretum, a to-be-built, 292-unit, garden-style rental community located in Farmingville, New York, a multifamily rental constrained market on Long Island. BRP has hired several diverse-owned businesses as vendors on the project and Basis Investment Group, a Black and female-owned commercial real estate investment firm, is acting as the preferred equity investor. This investment enables BRP Companies to expand its business beyond its historical focus of developing urban housing and highlights its strong capabilities and longstanding track record, which includes being New York City’s third most active real estate developer in 2020.2
  • In September 2021, the fund invested in Tricolor, a fintech company with a majority-diverse employee base that leverages proprietary AI-powered technology to sell and provide financing for high-quality, affordable used vehicles to underserved Latinx customers. The U.S. Latinx market is growing at 8.6 percent, faster than China or India, and is equivalent to the eighth largest economy in the world.3 Tricolor is headquartered in Dallas, Texas and operates 50 dealerships across 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 consumer auto finance issuer of a social bond. Tricolor is also certified by the U.S. 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, commented, “BlackRock believes it is essential that we collaborate with our clients and the broader financial services industry to identify opportunities that drive real, long-lasting impact in the communities that we serve. Through this fund, we are harnessing the power of the BlackRock platform and the active partnership of our clients to identify strong investment opportunities that align with our clients’ and partners’ ethos.”

Aaron Anderson, Senior Vice President and Treasurer, PayPal, commented, “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 be joining BlackRock and this initial group of investors to drive sustained economic growth and equity.”

Jayson Bronchetti, Chief Investment Officer and Head of Risk, Lincoln Financial Group,commented, “While we recognize that the issues around racial inequity will not be solved overnight, direct investments across private asset classes into undercapitalized 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 a measurable impact on undercapitalized communities.”

Victor Terry, Chief Diversity Officer, State Farm®, commented, “State Farm is committed to building safer, stronger, and better educated communities. We foster a diverse and inclusive culture within our company, throughout our communities and across all organizations with which we partner. Investing in the BlackRock Impact Opportunities Fund allows the chance for a connection to help more people experience financial well-being. 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, W.K. Kellogg Foundation, commented, “The BlackRock Impact Opportunities Fund is poised to have a tremendous impact on the movement to advance racial equity in financial markets with its influence and mission to get much needed capital to communities of color. We learned from the Business Case for Racial Equity that the U.S. stands to realize an increase in $2.7 trillion in GDP by closing the racial equity gap; that number could increase to $8 trillion by 2050. We’re proud to support this bold effort to reap those gains and to build on our long-standing relationship with BlackRock.”

About BlackRock Alternative Investors

BlackRock Alternative Investors serves investors seeking outperformance in real estate, infrastructure, private equity, credit, hedge funds and alternative solutions. We strive to bring our investors the highest quality investments by drawing upon our global footprint, superior execution capabilities and position as a preferred partner. BlackRock manages $330 billion in alternative investments and commitments on behalf of clients worldwide as of March 31, 2022.

Disclosures

This press release is for distribution in the United States only and should not be distributed in any other markets or to any other persons.

All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

This material is provided for informational purposes only and does not constitute an offer to sell nor a solicitation to invest in any jurisdiction in which such solicitation is unlawful or to any person to whom it is unlawful. Moreover, it neither constitutes an offer to enter into an investment agreement with the recipient of this document nor an invitation to respond to it by making an offer to enter into an investment agreement.

This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of yields or returns, and proposed or expected portfolio composition. Moreover, where certain historical performance information of other investment vehicles or composite accounts managed by BlackRock, Inc. and/or its subsidiaries (together, “BlackRock”) has been included in this material and such performance information is presented by way of example only. No representation is made that the performance presented will be achieved, or that every assumption made in achieving, calculating or presenting either the forward-looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein by way of example.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date on the cover and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to pass. Any investments named within this material may not necessarily be held in any accounts managed by BlackRock. Reliance upon information in this material is at the sole discretion of the reader. Past performance is no guarantee of future results.

AN INVESTMENT IN ANY OPPORTUNISTIC INVESTMENT OPPORTUNITY IS SPECULATIVE AND INCLUDES A HIGH DEGREE OF RISK, INCLUDING THE RISK OF A TOTAL LOSS OF CAPITAL. INTEREST IN THE OPPORTUNISTIC INVESTMENT OPPORTUNITY MAY BE ILLIQUID AND SUBJECT TO SIGNIFICANT RESTRICTIONS ON TRANSFER. ALL PROSPECTIVE INVESTORS SHOULD CAREFULLY REVIEW RELATED DOCUMENTATION FOR AN INVESTMENT OPPORTUNITY PRIOR TO MAKING AN INVESTMENT DECISION. ANY INVESTMENT DECISION WITH RESPECT TO SUCH INTERESTS MUST BE MADE SOLELY ON THE DEFINITIVE AND FINAL VERSION OF SUCH DOCUMENTS.

This document contains general information only and is not intended to represent general or specific investment advice. The information does not take into account your financial circumstances. An assessment should be made as to whether the information is appropriate for you having regard to your objectives, financial situation and needs.

Distributed by BlackRock Investments LLC, member FINRA.

BlackRock® is a registered trademark of BlackRock, Inc. All other trademarks are the property of their respective owners.

© 2022 BlackRock, Inc. All rights reserved.

___________________________

1Fitch Ratings, 2021
2The RealDeal, 2020
3LDC U.S. Latino GDP Report, 2020



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