BlackRock buys infrastructure investor for US$12.5 billion

Gatwick airport is one of the assets of Global Infrastructure Partners

GIP was founded in 2006 and is an infrastructure investment fund making equity and selected debt investments based on infrastructure assets in the energy, transport and water and waste sectors.

It is estimated that GIP has approximately US$106 billion in assets under management, meaning that the deal would make BlackRock the world’s second-largest manager of private infrastructure assets.

GIP assets include the Ports of Melbourne and Brisbane in Australia, and airports including Sydney, London Gatwick and Edinburgh. 

“From an investment perspective, BlackRock has added US$100 billion in assets to its alternative investment capabilities, and it is now pushing to have as much clout in the infrastructure space as Brookfield, which runs around US$180 billion in assets under management in this space,” Chris Sloley, editor of Citywire Selector, a financial media organisation, told Construction Briefing.

“It also comes as part of what BlackRock has termed ‘transformational M&A’, with its CEO Larry Fink emphasising the need to expand into areas beyond its historical areas of expertise and this is a quite aggressive opening effort. What this could do is lead other competitors to look at what infrastructure-focused groups are out there that could be purchased, so we could see something of an arms race when it comes to acquisitions,” added Sloley.

The trillion-dollar infrastructure sector has seen increased investment from private finance as investors seek long-term assets yielding more than traditional fixed income, as well as stability in an increasingly volatile world.