BlackRock has raised $2 billion for its flagship opportunistic credit fund, Global Credit Opportunities, as part of its push to establish a global private credit franchise.
The fund invests in corporate credit assets across geographies and industries, the world’s largest asset manager said.
Over the last few years, BlackRock has increased its resources for private credit in Asia, for U.S. and European middle markets, and for special situations.
“Investors looking for attractive risk-adjusted returns and portfolio diversification are increasingly looking to credit, where scale and expertise can help generate alpha,” BlackRock Global co-head of credit Tim O’Hara said in a statement.
“Building out our opportunistic credit strategy to take advantage of secular trends and cyclical dislocations in the credit markets is a natural evolution of our platform as we continue to bolster a credit business that can deliver for clients across risk spectrums and market cycles.”
BlackRock’s 2019 Global Institutional Rebalancing Survey found 56% of global respondents planned to increase their allocations to private credit.
In April 2018, BlackRock announced it was buying Tennenbaum Capital Partners, a manager focused on middle market performing credit and special situation credit, which had $9 billion in committed client capital.
At the time, chief executive Larry Fink said in a call with analysts that he expected illiquid alternative investments, which include private credit, to “be one of the more significant” drivers for the company’s business in the next few years, adding that the illiquid alternatives typically generated higher fees than other funds.
BlackRock said it generated $3 billion of net inflows and commitments across its illiquid alternatives business in the second quarter, led by credit.
The firm’s global credit platform oversees $100 billion in client assets. The company said it has more than 210 investment professionals in the global credit team. It has raised more than $5 billion in new client commitments for private credit strategies in the last two years.