BlackRock said: “A $1 trillion market today, infrastructure is forecast to be one of the fastest growing segments of private markets in the years ahead.
“A number of long-term structural trends support an acceleration in infrastructure investment.
“These include increasing global demand for upgraded digital infrastructure like fiber broadband, cell towers and data centers; renewed investment in logistical hubs such as airports, railroads and shipping ports as supply chains are rewired; and a movement toward decarbonization and energy security in many parts of the world.
“Further, large government deficits mean that the mobilization of capital through public-private partnerships will be critical for funding important infrastructure.
“Finally, as capital has become more scarce in a higher interest rate environment, companies are exploring partnership opportunities for their embedded infrastructure assets to improve their returns on invested capital or to raise capital to reinvest in their core businesses.
“BlackRock has a broad network of global corporate relationships as a long-term investor in both their debt and equity. These relationships will help us lead critical investments in infrastructure to improve outcomes for communities around the globe and generate long-term investment benefits for clients.
“The combination of GIP with BlackRock’s highly complementary infrastructure offerings creates a comprehensive global infrastructure franchise with differentiated origination and asset management capabilities.
“The over $150 billion combined business will seek to deliver clients market-leading, holistic infrastructure expertise across equity, debt and solutions at substantial scale.
“Marrying the proprietary origination and business improvement capabilities of GIP and BlackRock’s global corporate and sovereign relationships provides a platform for diversified, large-scale sourcing to support deal flow and co-investment opportunities for clients.
“We believe bringing GIP and BlackRock together will deliver to clients the benefits of broader origination and business improvement capabilities.”
The GIP management team, led by Bayo Ogunlesi and four of its founding partners, will lead the new, combined infrastructure platform.
BlackRock said it has also agreed to appoint Ogunlesi, GIP founding partner, chairman and CEO, to the board at the next regularly scheduled board meeting following the closing of the transaction.
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.
“I’m delighted for the opportunity to welcome Bayo and the GIP team to BlackRock, and happy to announce our plans to have Bayo join our board of directors post-closing.
“We founded BlackRock 35 years ago based on a unique understanding of investment risk and the factors and forces driving investment returns.
“GIP’s deep understanding of the factors and forces driving operational efficiency for long-term value creation have made them a global leader in infrastructure investing.
“Bringing these two firms together will create the infrastructure platform to deliver best-in-class investment opportunities for clients globally, and we couldn’t be more excited about the opportunities ahead of us.”
GIP’s Ogunlesi said: “I’m excited about the power of this combination and the prospect of working with Larry and his talented team.
“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 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.
“We are convinced that together we can create the world’s premier infrastructure investment firm.”
Perella Weinberg Partners served as lead financial advisor to BlackRock, with Skadden, Arps, Slate, Meagher & Flom and Fried, Frank, Harris, Shriver & Jacobson LLP acting as legal counsel. Evercore served as lead financial advisor and Kirkland & Ellis LLP and Debevoise & Plimpton LLP acted as legal counsel to GIP.