BlackRock to wind down fund that invested in failed car lender Tricolor
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Asset management firm BlackRock is terminating a social impact fund that invested in collapsed subprime auto bank Tricolor, according to several people familiar with the decision.
The company told employees it would close the BlackRock Impact Opportunities Fund to new investments after Tricolor filed for bankruptcy in September.
BlackRock will continue to manage the portfolio over an expected period of one to two years as it looks to sell the fund’s $800 million investments, before closing the entire strategy.
Tricolor’s bankruptcy was one of the motivating factors for the closure, two people familiar with the decision said. BlackRock has also held extensive discussions in recent months with the fund’s investors, who agreed to halt new investments after more than 80 percent of its assets were deployed over the four years since its launch, one of the people said.
The fund will now focus on the operations and sales of its portfolio companies, a person familiar with the matter said. BlackRock declined to comment.
The decision comes as BlackRock has withdrawn from several high-profile social impact strategies by removing ESG labels from some exchange-traded funds, or rebranding funds as “transitional” investments.
BlackRock has also scaled back voting for ESG shareholder proposals at a time when the Trump administration is cracking down on such initiatives.
The New York-based asset management firm invested $90 million to take a minority stake in the Dallas-based auto bank in 2021. The collapse of the Texas group, which primarily served the Latino community in the U.S. southwest — including people without credit scores — has raised broader concerns about the financial health of low-income people.
The Financial Times reported earlier that the Justice Department had opened an investigation into the Tricolor case over fraud allegations.
Before its collapse, Tricolor had been touting its credentials as a social impact company, saying it was able to lend to people who typically struggled to get credit elsewhere, including customers who didn’t have driver’s licenses or Social Security numbers.
BlackRock launched its Impact Opportunities Fund in 2021, saying at the time that it had secured $800 million in seed commitments to invest in “businesses and ventures owned, led, or serving people of color, with a particular focus on Black, Latino, and Native American communities in the United States.”
“We designed BIO to pursue opportunities that have historically been undercapitalized and, as a result, may offer mixed sources of return,” BlackRock CEO Larry Fink said in a statement on the company’s website.
In addition to Tricolor, the fund also led a $90 million minority investment in Macro, a media company focused on “producing premium, award-winning television and film content focused on people of color,” according to a 2023 press release.
It also backed Lone Peak Dental Group, a pediatric dental care company with “several practices strategically located to meet the needs of underserved populations.”
BlackRock was part of a group of high-profile Wall Street groups that backed Tricolor. The Financial Times previously reported that JPMorgan, the largest US bank by assets, Barclays and Fifth Third had hundreds of millions of dollars in lending exposure to Tricolor.
2025-11-08 00:29:00
