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Weekend Analysis

On BlackRock’s expansion into everything

The firm’s latest acquisition is a monumental example of private equity’s deepening foothold in infrastructure. And BlackRock isn’t alone.

BlackRock‘s latest infrastructure play is another (supremely large) tension rod supporting the leading asset manager’s ever-expanding bridge. Destination: everything.

In mid-January, private market giant BlackRock agreed to acquire Global Infrastructure Partners, a fund manager that specializes in the energy, transport, digital, water and waste sectors and touts around $100 billion in AUM.

The firm’s strategic infrastructure acquisition signals mounting interest in the asset class as well as a concerted effort among GPs to expand the capabilities of their firms in response to LP demand for one-stop shop asset managers.

BlackRock will pay around $12.5 billion in cash and stock for GIP’s book, swelling its infrastructure business to $150 billion and marking the firm’s largest acquisition since it purchased Barclays Global Investors in 2009.

The acquisition is a monumental example of private equity’s deepening foothold in infrastructure, and BlackRock isn’t alone.

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In September, CVC Capital Partners, a private markets manager focused on PE, secondaries and credit, bought infrastructure manager DIF Capital Partners, upping its AUM to around $192 billion. And in December, Investcorp acquired half of alternative investment firm Corsair Capital‘s $4.8 billion infrastructure business.

So why do asset managers want to scoop up infrastructure playbooks?

The simple answer is the strategy’s recent outperformance relative to other private market asset classes: Infrastructure does well during periods of market volatility.

At the end of 2022 and into the first quarter of 2023, real assets—which includes sectors such as infrastructure, commodities, and oil and gas—generated stronger returns on average than PE, VC, real estate, private debt, funds-of-funds or secondaries.

Infrastructure encompasses a wide range of products and processes that impact global economic development, centered around large and capital-intensive projects in sectors like transportation, communication, data, water and energy.

In Q1 2023, real assets was the private capital strategy with the best one-year performance, a spot it maintained for three consecutive quarters, according to PitchBook’s most recent Global Fund Performance Report. In fact, real assets was the only strategy that didn’t post a one-year horizon IRR that was lower than its five- or 10-year average in Q1 2023.

The outperformance is largely a product of the relative stability of the asset class: Real assets never reached the peaks that other strategies like VC and PE saw in 2021, which meant that it didn’t have to write down unrealized gains on overvalued assets when the market frenzy dried up in 2022.

On a broader scale, asset managers’ infrastructure theses hinge on two major changes to the economy over the next 20 years: the carbon transition and digital transformation, which will both require the build-out of new infrastructure, according to investors and analysts.

Neal Epstein, a senior credit officer at Moody’s, said investors are also looking at the development and implementation of artificial intelligence as an infrastructure item.

To note, PE and infrastructure investments comprised around 90% of all M&A in the digital infrastructure segment in 2022, PitchBook News previously reported.

Late last year, for example, Blackstone-affiliated infrastructure, real estate and tactical opportunities funds established a $7 billion joint venture with data center company Digital Realty to develop campuses in Frankfurt, Paris and Northern Virginia.

Data centers house and lease space to network computer servers and IT infrastructure that service individuals and businesses—critical components for the digitization of the economy.

Investors have identified another opportunity in the US’ aging transportation infrastructure, which will soon need to be replaced.

In a 2019 report, the World Economic Forum ranked the US 13th in terms of overall quality of infrastructure, and public investments in roads, bridges and public water and sewage has fallen by more than 40% since the 1960s.

Specifically, a report from the American Road & Transportation Builders Association found that one in three bridges in the US needs to be repaired or replaced.

“The thesis around infrastructure is compelling,” Epstein said. “Who can disagree? Society is going to need to redo energy and transportation and data.”

The revitalization of US domestic transportation infrastructure is a major theme in Investcorp Corsair’s pipeline, said managing partner Hari Rajan.

Before the merger with Investcorp last year, Corsair’s infrastructure business scooped up two major projects in New York. It closed a $4.2 billion deal with Vantage Airport Group, an airport development and operating company, to build a new international terminal at John F. Kennedy International Airport. Earlier in the year the firm conducted a similar revitalization project of Terminal B at LaGuardia Airport.

The model manager

Remember the bridge to everything?

The BlackRock deal is a shining example of a wave of consolidation in the asset management industry, where all but firms with the most niche strategies are feeling pressure to expand their businesses.

The world’s largest asset managers are aiming to be a one-stop shop for their LPs, a byproduct of a rapidly maturing alternatives industry in which the main asset class categories have become more diversified.

As the industry has grown, so too has the size of LP allocations.

In order to make those allocations, LPs have largely bypassed the phase of scouting individual managers in favor of working with bigger names with more product offerings and capabilities.

“So that’s meant that the mega names like Blackstone, KKR, Apollo, Brookfield are able to bring many things to a given investor client, and that scale has built an interest in consolidating relationships,” Epstein added.

This dynamic has upped the ante for acquiring strong GPs and building out various asset class capabilities at big firms. Compared to peers like Brookfield, BlackRock entered the infrastructure game later and has been playing catch-up ever since, said Epstein.

And its efforts are apparently paying off. The GIP acquisition almost tripled the firm’s infrastructure AUM and brought the combined platform to the second-largest infrastructure asset manager, according to the firm’s own estimations.


The Investcorp Corsair combination expanded Investcorp’s product offerings into a global investment strategy in transportation, logistics, and associated subsectors.

Prior to the acquisition, Investcorp’s infrastructure strategy focused exclusively on projects in the Persian Gulf through a joint venture with Aberdeen Standard Investments.

“This is really [Investcorp’s] entry into global infrastructure,” Rajan said.

“It’s a sector that is very hard for large organizations to penetrate,” he added. “There is a tremendous amount of opportunity, but capital is really not a differentiator at this point.”

As we move into the new year, it’s a safe assumption that infrastructure AUM will continue to grow as asset managers continue their crusade into multi-strategism.

The bridge extends.

Correction: An earlier version of this article said Investcorp acquired Corsair Capital’s infrastructure business. The firm acquired a 50% stake in Corsair’s infrastructure business. (Jan. 23, 2024)

Featured image by Jenna O’Malley/PitchBook News

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