Investment giant BlackRock announced today the acquisition of infrastructure investor Global Infrastructure Partners (GIP) in a cash and stock deal valuing the company at $12.5 billion, citing emerging long-term opportunities in areas including decarbonization, energy security, digital infrastructure, and supply chain transitions.
Founded in 2006, New York-based GIP is the world’s largest independent infrastructure manager with over $100 billion in assets under management across infrastructure equity and credit strategies, targeting investments in the energy, transportation, digital, and water and waste sectors. The company’s investments include major renewables platforms Clearway, Vena, Atlas and Eolian, in addition to the Gatwick, Edinburgh, and Sydney airports, data center developers CyrusOne, waste and water circular solutions provider Suez, and rail and port operators.
The deal follows BlackRock’s characterization of infrastructure as a major source of investment opportunity in its recent 2024 Private Markets Outlook, released in December, driven by the low-carbon transition as a key mega-theme, and highlighting an upcoming “massive reallocation of capital” to rewire energy systems around the world. GIP has described decarbonization as central to its investment thesis.
In its press release announcing the acquisition, BlackRock said that the deal comes as “infrastructure is forecast to be one of the fastest growing segments of private markets in the years ahead,” with key drivers including increasing global demand for upgraded digital infrastructure, supply chain rewiring leading to renewed investment in logistical hubs such as airports, railroads and shipping ports, and decarbonization and energy security trends around the world.
BlackRock also noted the opportunities for infrastructure-focused private investors from participate in public-private partnerships in an environment of large government deficits, in addition to a conducive environment driven by high interest rates, with companies looking to improve return on capital through partnership opportunities for their embedded infrastructure assets.
BlackRock Chairman and CEO Larry Fink said:
“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. Policymakers are only just beginning to implement once-in-a-generation financial incentives for new infrastructure technologies and projects.”
Post-acquisition the combined company will boast a greater than $150 billion global infrastructure platform, led by the GIP management team. GIP founding partner, Chairman and CEO Bayo Ogunlesi will also join the board of BlackRock, following the close of the transaction, the companies said.
“Investors have adopted private infrastructure investing for its ability to provide stable cashflows, less correlated returns, and a hedge against inflation. Global corporates have turned to private infrastructure as a fast innovator and a more commercially agile owner of infrastructure assets that aren’t core to their commercial businesses. 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.”