BlackRock, Inc. has agreed to acquire independent infrastructure fund manager Global Infrastructure Partners (GIP), for a total consideration of $3 billion in cash and approximately 12 million shares of BlackRock common stock. This strategic acquisition is set against the backdrop of a rapidly growing $1 trillion infrastructure market, driven by increasing global demand for advanced digital, logistical, and decarbonisation infrastructure.
The deal underscores a broader industry trend where public-private partnerships are becoming increasingly vital for infrastructure funding, especially in light of large government deficits. The rising interest rate environment, leading to scarcer capital, further accentuates the importance of such partnerships.
BlackRock’s extensive global corporate relationships, cultivated through long-term investments in both debt and equity, are expected to play a pivotal role in leading significant infrastructure investments worldwide. This acquisition will consolidate GIP’s robust infrastructure offerings with BlackRock’s existing capabilities, creating a comprehensive global infrastructure franchise. The combined entity, valued at over $150 billion, aims to offer market-leading, holistic infrastructure expertise across various segments including equity and debt.
GIP, established in 2006, is a leading independent infrastructure investor managing over $100 billion in client assets, with a focus on sectors such as energy, transport, and digital infrastructure. Its success is attributed to proprietary origination, operational improvements, and strategic exits. BlackRock’s infrastructure client assets under management, valued at over $50 billion, encompass equity, debt, and solutions in infrastructure. The company has successfully scaled its global equity flagship series, with the most recent fully invested flagship fund in 2019 surpassing $22 billion.
The combined infrastructure platform will be led by GIP’s management team, including the company’s Founding Partner, Chairman, and CEO, Bayo Ogunlesi, and four founding partners. This team brings a wealth of investment and operational expertise, with a notable track record in private markets. Post-acquisition, Bayo Ogunlesi is set to join BlackRock’s Board.
“We share with BlackRock a culture of collaboration, client focus, investment partnership, and commitment to excellence,” commented Ogunlesi. “Investors have adopted private infrastructure investing for its ability to provide stable cashflows, less correlated returns, and a hedge against inflation. Global corporates have turned to private infrastructure as a fast innovator and a more commercially agile owner of infrastructure assets that aren’t core to their commercial businesses. This platform is set to be the preeminent, one-stop infrastructure solutions provider for global corporates and the public sector, mobilizing long-term private capital through long-standing firm relationships.”
This acquisition represents a significant move by BlackRock to deepen its infrastructure investment capabilities, reflecting the growing importance of this asset class in the global economy. The integration of GIP’s and BlackRock’s platforms is anticipated to offer enhanced origination and business improvement capabilities, providing substantial benefits to clients in this expanding market sector.
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