BlackRock has already raised £250 million from six pension funds. The fund manager said the new vehicle will focus on alternative property assets in the UK including student accommodation, ground leases, primary healthcare and housing associations.
It will also invest in more traditional commercial long-lease assets such as supermarkets and offices.
The UK Long Lease Property Fund has already invested more than £100 million of the seed portfolio in property assets with an average lease term of 20 years.
BlackRock targets a five per cent yield with the new vehicle, which will be distributed monthly. The firm said this will make the fund attractive to pension funds and other institutional investors looking to match their liabilities with inflation-linked income.
Marcus Sperber, Head of Real Estate in Europe, the Middle East and Africa at BlackRock, said: “Both traditional and non-traditional real estate can provide pension schemes with alternative sources of long-dated income, but we see alternative property assets coming more into vogue.
“We have instantly put money to work with this new strategy and are looking for other assets to acquire to build the portfolio further.”
Earlier this month, the government hired BlackRock to assess the value of the Royal Bank of Scotland Group’s assets and value of portfolios as the Treasury reviews a potential break-up of the bailed out lender.
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