BlackRock, one of the world’s largest global asset management companies, is betting on infrastructure by acquiring Global Infrastructure Partners (GIP), the world’s largest independent infrastructure manager with over $100 billion in assets under management.
BlackRock is acquiring GIP for $3 billion in cash and approximately 12 million shares of BlackRock common stock. According to BlackRock, infrastructure, a $1 trillion market today, is forecast to be one of the fastest-growing segments of private markets over the next three years.
The asset management giant sees an acceleration in infrastructure investment happening currently, including demand for upgraded digital infrastructure, such as fiber broadband, cell towers, and data centers; logistical hubs such as airports, railroads, and shipping ports; and decarbonization efforts and energy security.
The acquisition comes as the United States is undertaking a significant push in its renewable energy infrastructure thanks to funding and incentive and grant opportunities established in the Inflation Reduction Act. The law has helped create hundreds of new projects in solar, wind, hydrogen, and other clean-energy efforts.
BlackRock also views the public-private capital relationship deepening for funding infrastructure. Plus, companies seeking relief from high-interest rates will likely turn to their infrastructure assets for better returns on invested capital or to raise capital to reinvest in their core businesses. All these trends point BlackRock toward infrastructure investing.
“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy,” Laurence Fink, BlackRock chairman and CEO, said in a statement. “We believe the expansion of both physical and digital infrastructure will continue to accelerate, as governments prioritize self-sufficiency and security through increased domestic industrial capacity, energy independence, and onshoring or near-shoring of critical sectors. Policymakers are only just beginning to implement once-in-a-generation financial incentives for new infrastructure technologies and projects.”
In November 2023 BlackRock said its Evergreen Infrastructure Fund had secured nearly $1 billion from European investors.
BlackRock aims to leverage its complementary infrastructure offerings alongside its acquisition of GIP to create a comprehensive global infrastructure franchise.
The business will have a combined $150 billion value and offer its clients expertise across equity, debt, and solutions. GIP’s assets focus on energy, transport, water, waste, and digital sectors. BlackRock has more than $50 billion in client assets under management of infrastructure equity, debt, and solutions.
Under the terms of the deal, GIP leadership, including Bayo Ogunlesi and four of its founding partners, will continue to lead the combined infrastructure platform. Ogunlesi will also be appointed to the board. GIP and its more than 40 portfolio companies generate over $75 billion in annual revenue and employ approximately 115,000 people.
