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(Bloomberg) -- BlackRock Inc. said it’s writing down the value of one of its flagship renewable funds after two key investments for the vehicle collapsed, and it’s enlisting executives from its recently acquired Global Infrastructure Partners business to help turn around performance.

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In a letter to clients Thursday, GIP executives said the “significant markdowns” were driven by ill-fated investments in two now-defunct renewable firms — Northvolt and SolarZero — and fueled a broader look at the portfolio’s projected performance.

A review of assets within BlackRock’s Global Renewable Power Fund III wiped its net internal rate of return to negative 0.3% at the end of the third quarter, slashing it from 11.5% in the second quarter. The fund had a final close of $4.8 billion in 2021.

The fund’s prior iteration, Global Renewable Power Fund II, had a net internal rate of return of 4.7% in the third quarter, down from 6.9% in previous quarter.

“These revisions are driven by adjusted market assumptions and updated business plans from individual portfolio companies,” GIP President Raj Rao and GIP partner Bruce MacLennan wrote in the letter, which was reviewed by Bloomberg. “We have also revised certain assumptions GRP was using for discount rates and potential exit valuations for renewables development assets to align with the current market outlook.”

MacLennan will assume leadership of the funds and work with David Giordano, who set up the investments, and other GIP and BlackRock staff to attempt to maximize the portfolio’s value.

‘Particularly Challenged’

The vehicle was BlackRock’s third flagship GRP fund, part of its bet on the energy transition and a push toward renewable energy and infrastructure before it acquired GIP earlier this year. The fund invests in renewable power generation and supporting infrastructure across the Americas, Europe and Asia.

Many of GRP’s assets are early-stage climate infrastructure investments in three sectors: EV charging, renewable generation, and power storage and transmission.

These sectors have been “particularly challenged,” the GIP executives told clients, adding that many portfolio companies don’t yet have a positive cash flow and are subject to development risk. That “positions their valuations to be more subjective and sensitive to evolving dynamics in the industry,” Rao and MacLennan wrote in the letter.