The largest money manager in the world, BlackRock Inc., has agreed to pay around $12.5 billion to acquire Adebayo Ogunlesi’s Global Infrastructure Partners (GIP), propelling BlackRock into the elite group of investors that place long-term bets on energy, transportation, and digital infrastructure around the globe.
BlackRock is scheduled to finalise the transaction in the third quarter, paying $3 billion in cash and around 12 million shares, which are valued at $9.5 billion as of Thursday’s closing. Ogunlesi, the chairman and CEO of GIP and a previous executive at Credit Suisse will join BlackRock’s board and global executive committee.
After the purchase concludes, the company will own around $150 billion worth of infrastructure assets spread over a portfolio that includes airports in England and Australia, wastewater services in France and the U.S. market for exporting liquefied natural gas.
Due to the enormous need for digital infrastructure and logistics as well as the billions of dollars required to move away from high-carbon energy, institutional investors are becoming more and more interested in this asset class.
The Chief Executive of BlackRock, 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.”
BlackRock, which oversees $10 trillion in assets across all markets, has been searching for what it believes to be a game-changing acquisition since its revenues stopped growing and political attacks had targeted its corporate governance, social and environmental business in the US.
GIP, which was established in 2006, is responsible for overseeing over $100 billion in assets, encompassing large offshore wind projects, the Port of Melbourne, and the Gatwick airport in Britain.
BlackRock also revealed changes to its top management team at a time when rumours about Fink’s successor, who launched the company in 1988, have been circulating.
According to a company memo, Salim Ramji, global head of iShares and index investments, is leaving, and Stephen Cohen is to take over as chief product officer and will head a new global product strategy division.
According to the document, BlackRock is also forming a new global business organisation led by Rachel Lord that will include Europe, the Middle East, India, and Asia Pacific.
Following the deal’s closing, GIP Chairman Bayo Ogunlesi, along with five other founding partners of GIP, will become directors of BlackRock, the statement continued.
The Goldman CEO, David Solomon, said on Friday that following his departure to BlackRock, Ogunlesi will resign from the Goldman Sachs board.
According to CFRA analyst Cathy Seifert, the agreement brings “new contenders” to the field of applicants hoping to replace Fink, who, at 71, has not yet announced his choice for a successor.