BlackRock has partnered with PCG Impact, the advisory arm of Amsterdam-founded impact investing specialist Phenix Capital Group, to expand its impact investing capabilities for institutional investors, citing growing demand from pension funds for portfolios that combine measurable outcomes with long-term financial returns.
The collaboration will combine BlackRock’s portfolio construction, implementation, risk management and oversight capabilities with PCG Impact’s research covering more than 3,000 impact fund managers, alongside its advisory and reporting expertise.
The offering will be available to institutional investors, including pension funds, family offices, endowments and foundations, through outsourced chief investment officer (OCIO) portfolios and customised impact mandates.
According to BlackRock, the collaboration reflects increasing interest from institutional investors, particularly pension funds and OCIO clients, in incorporating impact investing into strategic asset allocation.
Sarju Mehta, head of investment solutions, EMEA, multi-asset strategies and solutions at BlackRock, told IPE in a statement that the initiative was developed in response to changing client demand.
“This collaboration is a direct response to growing demand from institutional investors, particularly pension funds and OCIO clients, for impact investing solutions,” he said.
Mehta added that pension funds were increasingly looking for ways to demonstrate to members how their retirement savings contribute to measurable outcomes alongside financial objectives.
“In our conversations with these pension funds, we increasingly hear that participants want a clearer understanding of how their retirement savings are invested and what outcomes they are helping to achieve. For many schemes, impact investing can help bridge that gap by connecting long-term financial objectives with tangible, measurable outcomes, creating a more meaningful dialogue with participants,” he told IPE.
“We increasingly hear that participants want a clearer understanding of how their retirement savings are invested”
Sarju Mehta at BlackRock
He said impact investing was becoming part of broader strategic portfolio discussions rather than being viewed as a niche allocation.
The firm has designed the offering to scale alongside demand for dedicated impact allocations. Mehta noted that, in more mature markets such as the UK and the Netherlands, asset owners with dedicated impact allocations typically hold between 5% and 10% of portfolio assets within their long-term strategic asset allocation.
“As these allocations become more meaningful in size, investors are looking for specialist expertise to help identify, assess and monitor high-quality impact opportunities across a broad and evolving market,” he said.
Dirk Meuleman, chief executive officer of PCG Impact, said the collaboration combined BlackRock’s global investment and OCIO capabilities with PCG Impact’s specialist market intelligence, manager research and reporting expertise.
He added: “PCG Impact was founded to make institutional impact investing work at scale and this is exactly what this new offering will do.”
