M&A
January 12, 2024
3 minutes read

BlackRock To Buy Private Equity Firm GIP For $12.5B

BlackRock (NYSE: BLK), the American asset management giant, has struck a deal to acquire Global Infrastructure Partners (GIP), a private…

BlackRock (NYSE: BLK), the American asset management giant, has struck a deal to acquire Global Infrastructure Partners (GIP), a private equity firm focused on infrastructure investments.

BlackRock will pay $3bn in cash and 12 million common shares worth $9.5bn, totaling $12.5bn. That price marks the largest-ever acquisition of a private equity firm.

Global Infrastructure Partners (GIP) was founded in 2006 by Adebayo Ogunlesi, a Nigerian-born lawyer and investment banker. Early in his career, Ogunlesi worked at American investment bank First Boston, which Switzerland’s Credit Suisse acquired in 1988. He was an executive at Credit Suisse before founding GIP.

At First Boston, Ogunlesi worked alongside Larry Fink, the future co-founder and chief executive of BlackRock.

Global Infrastructure Partners is one of the world’s biggest private investors in infrastructure projects. Its portfolio includes Gatwick Airport, Britain’s second-busiest airport; Freeport LNG, America’s biggest natural gas export facility; the Port of Melbourne, Australia’s largest container port; and the Hornsea Wind Farm in England.

Global Infrastructure Partners has over $100bn of assets under management (AUM), according to its website.

BlackRock is placing a big bet on private infrastructure investments by acquiring GIP. “The unprecedented need for new infrastructure – for digital infrastructure, for upgraded logistics hubs, and for decarbonization and energy security – coupled with record high government deficits means that private capital will be needed like never before,” Fink and BlackRock President Rob Kapito penned in a memo to employees.

With global inflation rising, infrastructure projects like airports, sea ports, and power plants with relatively stable cash flows have become more attractive assets for private investors. BlackRock already manages $50bn of infrastructure assets and is extending its reach in the sector by acquiring GIP.

A $12.5bn price tag means massive payouts for Ogunlesi, GIP’s founder, and other executives at the private equity firm. Once the acquisition closes, five of GIP’s founding partners, including Ogunlesi, will join BlackRock and oversee the firm’s infrastructure investments. Ogunlesi will join BlackRock’s board and global executive committee.