Investment giant BlackRock (BLK) announced today the release of its 2024 Private Markets Outlook, identifying the low-carbon transition as one of a few key “mega forces” that it expects to drive “major investment opportunities” over the next year, and calling out specific infrastructure-related areas including clean energy and electrification.

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In its report, BlackRock highlights the “massive reallocation of capital” expected to be driven by the need to rewire energy systems in order to transition to a low carbon economy. The firm said that according to its BlackRock Investment Institute Transition Scenario (BIITS), capital investment in the global energy system could double to $4 trillion annually through 2050 driven by the adoption of low carbon energy sources, which it expects to make up 70% of the world’s energy by 2050. BlackRock said that it developed BIITS to help assess how the low carbon transition is expected to play out, and the potential impact on portfolios.

In addition to decarbonization solutions, BlackRock also noted investment opportunities in climate resilience, or the preparation and adaptation to climate hazards, as well as rebuilding after climate-related damage.

Driven by these factors, BlackRock’s review says that “infrastructure is having a moment,” adding that:

“The need to reconfigure the global energy system to decarbonize the economy is one driving mega force that presents considerable long-term private markets investment opportunities in infrastructure development.”

Specific infrastructure opportunities highlighted by the review included “energy storage, the electrification of transport, and alternative fuels for aviation and marine.”

The report follows a series of moves by BlackRock over the past few months to address climate and energy transition-related infrastructure opportunities. In October, the firm launched a new Climate Transition-Oriented Private Debt Fund, which has already received a $1 billion commitment from the UAE’s new climate investment platform, ALTÉRRA, with another $1 billion from ALTÉRRA to be invested in transition-related infrastructure through BlackRock’s infrastructure equity strategies. In November, the firm also announced that it has raised nearly $1 billion in client commitments at the initial close of its energy transition and energy security-focused Evergreen Infrastructure fund.

Additional private market megatrends highlighted by the report included “digital disruption and AI,” “demographic divergence,” “the future of finance,” and “geopolitical fragmentation.” Click here to access the report.

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