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BlackRock to boost private markets business with $12.5B GIP purchase

The Global Infrastructure Partners acquisition is a major boost to BlackRock’s private markets plans.

BlackRock CEO Larry Fink (Thos Robinson/Getty Images)


BlackRock, one of the world’s largest asset managers, has agreed to acquire Global Infrastructure Partners in a roughly $12.5 billion cash and stock deal.

The acquisition of GIP, a specialist infrastructure investor, will grow BlackRock’s infrastructure assets to around $150 billion.

GIP has holdings across the energy, telecoms, transport, water and waste management sectors. For instance, it owns Sydney Airport and London’s Gatwick Airport and has large stakes in French water and waste management specialist Suez and European cellular towers business Vantage Towers.

The firm is sitting on a lot of dry powder. Its $22 billion Global Infrastructure Partners IV, which closed in 2019, is the third largest infrastructure fund on record, according to PitchBook data.

 

BlackRock announced in June that it aims to double its private markets revenue over the next five years, so the GIP purchase is not especially surprising, said PitchBook analyst Nicolas Moura, who added that the firm had been lagging in its private market activity to date.

“We expect BlackRock to look for further acquisitions within other alternatives segments,” Moura said. “Given the higher-for-longer rates consensus, we suspect certain PE buyout firms may struggle with their balance sheets in 2024 and may seek a sale, which could draw in a giant like BlackRock looking to expand its private markets AUM.”

BlackRock expects infrastructure to be one of the fastest growing areas of the private markets, pointing to major drivers like increasing demand for upgraded digital infrastructure, the need for improvements to logistical hubs like airports and shipping ports, and the push toward decarbonization. In turn, the firm suggests that constrained public finances mean governments will have to use public-private partnerships to fund major infrastructure projects.

BlackRock CEO and chair Larry Fink said in a statement: “Bringing these two firms together will create the infrastructure platform to deliver best-in-class investment opportunities for clients globally.”

Outside of BlackRock, other GPs have also been showing a keen interest in acquiring infrastructure-focused investment firms. According to PitchBook, the GIP deal is the ninth of its kind in the last two years. Notable deals last year included Bridgepoint‘s $1.1 billion acquisition of Energy Capital Partners and Blue Owl Capital‘s GP stake in Stonepeak, which is covered in more detail in PitchBook’s US Public PE and GP Deal Roundup.

“GPs remain active and acquisitive in the infrastructure asset class as managers look to expand AUM, increase fee-earning segments, and scale overall growth,” said Tim Clarke, lead private equity analyst at PitchBook. “Major tailwinds, including the Inflation Reduction Act and Infrastructure Investment and Jobs Act, have helped propel investor interest in infrastructure.”

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