Global investment giant BlackRock is making a major push into the alternative investments space having agreed to acquire Global Infrastructure Partners (GIP), in a deal worth $12.5bn, according to a report by Reuters.
The deal includes $3bn cash payment, plus 12 million BlackRock shares, and will make BlackRock a major investor in ports, power, and digital infrastructure projects around the globe. On closing, the firm will hold approximately $150bn in infrastructure assets across a portfolio that ranges from the US liquefied natural gas export market to wastewater services in France, as well as airports in England and Australia, according to the report.
Soaring demand for logistics and digital infrastructure, and the trillions of dollars needed for the transition away from high-carbon energy, have made the asset class increasingly popular among institutional investors.
“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy,” said chief executive Larry Fink.
BlackRock, which manages $10tn across all markets, has been on the hunt for what it hopes will be a transformative deal as its revenues have stagnated and its environmental, social, and corporate governance business has come under political attacks in the United States.
“This is [Fink’s] chance to put his final fingerprint on the company” and allow it to compete with firms such as Blackstone and Apollo Global Management, said Kyle Sanders, an analyst at Edward Jones, who has a buy rating on the stock.
Founded in 2006, GIP currently manages more than $100bn in assets, across a portfolio that includes the UK’s Gatwick airport, the Port of Melbourne, in Australia, and major offshore wind projects.
BlackRock, which manages $10tn across all markets, has also announced changes to its senior team and management structure amid speculation over who will succeed Chief Executive Officer Larry Fink, who founded the business in 1988.
The report also cites a company memo seen by Reuters as revealing that Stephen Cohen has been made Chief Product Officer and will lead a new global product strategy group, while Salim Ramji, Global Head of iShares and index investments, is leaving the company.
Rachel Lord has also been appointed to lead Europe, the Middle East, India, and Asia Pacific, according to the memo, while five of GIP’s founding partners will join BlackRock, including Chairman Adebayo Ogunlesi, who will also join BlackRock’s board of directors following closure of the deal.
