BlackRock Australasia chief executive Andrew Landman’s first brush with New Zealand “was not wonderful”, he recalls.
“When I was first being interviewed to join BlackRock, I was sadly here for the semifinals of the [Rugby] World Cup, with an Australian jersey ... Sadly, we lost.”
But this week, Landman was back in New Zealand announcing a win-win development alongside our Government - a $2 billion private fund to invest in businesses and technologies that could take our electricity consumption to 100 per cent renewable by 2030.
“New Zealand has a history of innovation. We also have a history of investing retirement savings for our clients here. So, we have a dual love for the country,” Landman told the Herald in an exclusive interview following the announcement on Tuesday.
The committed amount was just a slice of the total investment needed to achieve 100 per cent, which BlackRock priced at $42 billion.
And it was a drop in the bucket compared with BlackRock’s total assets under management, which totalled US$8.59 trillion at the end of 2022, down from a record US$10T in 2021.
However, Landman said the money it was spending here still made it to the very top of the firm, with its global chief executive Larry Fink excitedly posting about it on LinkedIn.
“It really has got global recognition internally, which is a proud moment.
“We don’t think about the size of our business, it’s client money. $2 billion is a lot of money and we respect that.”
It’s no surprise BlackRock is getting behind our energy transition - sustainable finance is its bread and butter.
It set up a climate infrastructure division in 2012, while Fink is considered a sort of godfather of “ESG” investment - an acronym that stands for environmental, social and governance outcomes, but encompasses the broader ideology of using money to do good.
While those intentions remained, Fink and BlackRock were now shifting away from using that term.
“It’s an acronym that has been branded ... And it has been weaponised,” Landman said.
This investment in New Zealand was just as much about profit as it was the planet.
“This is really about providing a great return in an asset class that our clients want.”
Landman’s statements echoed those said and written by Fink.
He wrote this in his 2022 letter to shareholders: “We focus on sustainability not because we’re environmentalists, but because we are capitalists.”
In that same letter, he stressed the economic opportunity for decarbonisation and implored businesses to think deeply about their role in it.
“As your industry gets transformed by the energy transition, will you go the way of the dodo, or will you be a phoenix?”
Who would have thought BlackRock would find those phoenixes in New Zealand.
“The companies we’re looking at and starting to look at [in New Zealand], the period of innovation and the per capita innovation, we think, is a great investment thesis,” Landman said.
Although those soon-to-be-funded businesses wouldn’t be BlackRock’s first investment here.
In a $100m-plus deal last year it acquired solarZero, an Auckland-based solar and battery technology platform that helped manage the supply of energy in our grid. solarZero was backed by $50m in debt funding from the Government’s Green Investment Finance fund.
Our Government’s road to net zero strategy clearly aligned with its interests.
When asked if BlackRock was putting its name on a target that was close to the finish line (New Zealand’s renewable electricity consumption was sitting at 90 per cent this winter according to Energy & Resources Minister Megan Woods), Landman said “achievability” was part of its decision, but not the ultimate factor.
“There is a component of the branding of [net zero] 2050 or 100 per cent [renewables], but, more importantly, our investors want investment objectives and want good returns.”
The returns it was aiming for sat somewhere among the global expectations of high single-digits, BlackRock’s Asia Pacific co-head of climate infrastructure Charlie Reid added.
Landman said this was not the last we’d see of BlackRock’s bullishness here.
“We think we have a wonderful opportunity to grow more with New Zealand and this is one part of that.”
Madison Reidy is the host of New Zealand’s only financial markets show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.