BlackRock has acquired Global Infrastructure Partners, one of the world’s biggest independent investors in roads, airports, utilities and other projects.
The world’s largest asset manager is buying GIP, which has $100 billion in assets, for $12.5 billion in cash and stock ($3 billion of cash and approximately 12 million shares of common stock). The deal announced Friday morning is BlackRock’s biggest in 15 years, since it bought Barclays Global Investors in 2009.
Today, infrastructure is a $1 trillion market but it is forecasted to be one of the fastest growing segments of private markets.
“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy. 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,” Larry Fink, BlackRock’s chairman and CEO, said. “Policymakers are only just beginning to implement once-in-a-generation financial incentives for new infrastructure technologies and projects.”
The deal triples the size of BlackRock’s existing $50 billion infrastructure business to $150 billion. BlackRock says the combination will create a top debt and equity investment business, strengthen its deal flow and improve its co-investment capabilities.
GIP’s management team, led by Bayo Ogunlesi and four of its founding partners, will join BlackRock and lead the new platform. Ogunlesi, chairman and CEO of GIP, will also join BlackRock’s board after the deal closes.
“I’m excited about the power of this combination and the prospect of working with Larry and his talented team,” Ogunlesi said. “Investors have adopted private infrastructure investing for its ability to provide stable cash flows, less correlated returns, and a hedge against inflation.”
Last summer, BlackRock cannonballed into the venture debt market with the acquisition of London-based asset manager Kreos, reminding markets that it’s always considering acquisitions. At the time, its strategic objectives, financial health, and posturing by its executives suggested that more acquisitions could be coming, research analysts said.