BlackRock Inc. has finalized a colossal $12.5 billion acquisition of Adebayo Ogunlesi’s Global Infrastructure Partners (GIP).
The deal positions BlackRock, already the world’s largest money manager, as a formidable player in long-term investments spanning energy, transportation, and digital infrastructure.
Adebayo Ogunlesi, a prominent Nigerian businessman and former Credit Suisse executive, is the Chairman and CEO of GIP, a global leader managing a substantial $100 billion portfolio.
The acquisition, sealed with $3 billion in cash and approximately 12 million BlackRock shares valued at $9.5 billion, marks BlackRock’s most significant move in over a decade.
The announcement comes alongside a notable management shuffle with Ogunlesi set to join BlackRock’s board and global executive committee.
BlackRock, under the leadership of CEO Larry Fink, aims to transform the firm into a key player in the burgeoning market for private and alternative assets.
Fink and BlackRock President Rob Kapito emphasized the increasing need for new infrastructure, including digital infrastructure, upgraded logistics hubs, and efforts toward decarbonization and energy security.
They predict that private capital will play a pivotal role in addressing the unprecedented demand for infrastructure, making it one of the fastest-growing areas in the industry over the next decade.
The acquisition of GIP, known for managing critical stakes in major infrastructure projects globally, aligns with BlackRock’s strategy to become a comprehensive investment solution, offering a full range of options, including alternative assets.
Although alternatives currently constitute around 3% of BlackRock’s assets under management, they contribute roughly 10% of the fees.
Combining GIP’s $100 billion management with BlackRock’s $50 billion infrastructure assets creates a powerhouse that rivals industry giants like Macquarie Asset Management and Brookfield Asset Management.
The move solidifies BlackRock’s position in infrastructure investments and reflects its anticipation of a $15 trillion spending gap on global infrastructure through the end of the decade.
Adebayo Ogunlesi, who founded GIP in 2006 with backing from General Electric Co. and Credit Suisse, has been a key figure in the infrastructure investment realm.
GIP’s portfolio boasts annual revenues exceeding $80 billion, and the firm has been a major player in significant infrastructure projects worldwide.
The $12.5 billion acquisition is set to be completed in the third quarter, representing a significant milestone in BlackRock’s journey to become a dominant force in private and alternative assets.
