In a noteworthy development in the financial sector, BlackRock, a global investment management behemoth, has revealed plans to acquire independent infrastructure fund manager Global Infrastructure Partners (GIP) in a substantial deal valued at $12.5 billion. The agreement includes $3 billion in cash and approximately 12 million shares of BlackRock common stock.
Highlighting its extensive global corporate relationships and role as a long-term investor in debt and equity, BlackRock envisions that the acquisition will fortify its ability to spearhead crucial investments in infrastructure. The overarching goal is to contribute to global community development and generate enduring investment benefits for clients.
The amalgamation of GIP with BlackRock's existing infrastructure offerings is anticipated to create a comprehensive global infrastructure franchise, boasting distinctive origination and asset management capabilities. The combined business, with a valuation exceeding $150 billion, aspires to offer clients market-leading expertise across equity, debt, and solutions at a significant scale.
The collaboration is poised to leverage GIP's proprietary origination and business improvement capabilities alongside BlackRock's global corporate and sovereign relationships. This synergy is expected to establish a platform for diversified, large-scale sourcing, supporting deal flow, and co-investment opportunities for clients.
GIP, founded in 2006, manages over $100 billion in client assets across infrastructure equity and debt, concentrating on energy, transport, water and waste, and digital sectors. BlackRock underscores GIP's successful scaling of its global equity flagship series, with the most recent fully invested flagship fund exceeding $22 billion in 2019.
The leadership baton for the combined infrastructure platform is slated to be held by the GIP management team, led by Bayo Ogunlesi and four founding partners. BlackRock emphasizes their track record of building and running high-performing private markets businesses, underscoring their unwavering commitment to clients.
Subject to customary onboarding procedures, BlackRock has also committed to appointing GIP founding partner, chairman, and chief executive Ogunlesi to its board following the completion of the transaction.
In expressing his enthusiasm, BlackRock Chairman and Chief Executive Laurence D Fink highlighted the exciting opportunities presented by the expansion of physical and digital infrastructure. He warmly welcomed Ogunlesi and the GIP team to BlackRock, noting the synergies in understanding investment risk and factors driving investment returns.
Ogunlesi echoed the sentiment, expressing excitement about the combination and the prospect of collaborating with BlackRock. He envisions the platform as a preeminent infrastructure solutions provider for global corporates and the public sector, mobilizing long-term private capital through established firm relationships. According to Ogunlesi, the deal positions the collaboration to become the world's premier infrastructure investment firm.
Ogunlesi's perspective on the collaboration is captured in his statement: “We share with BlackRock a culture of collaboration, client focus, investment partnership, and commitment to excellence. Investors have adopted private infrastructure investing for its ability to provide stable cash flows, less correlated returns, and a hedge against inflation. This platform is set to be the preeminent, one-stop infrastructure solutions provider for global corporates and the public sector, mobilizing long-term private capital through long-standing firm relationships. We are convinced that together we can create the world's premier infrastructure investment firm.”