BlackRock chief executive Larry Fink has been searching for years for the right private markets partner to make his $10tn money manager as formidable a player in alternative investments as it is in traditional asset management.

His overtures to private equity, private credit and hedge funds rarely got beyond the first meal. Often the cultures or business models clashed. When the alternatives titans got intrigued by the idea of a tie-up, they proved unwilling to give BlackRock the majority control it wanted.

Global Infrastructure Partners was different. When Fink and GIP founder Adebayo Ogunlesi met for an October dinner at Fasano, an Italian restaurant steps away from Rockefeller Center in New York, the menu included plans for a combination that could shake up the investment management industry.

Ogunlesi had built GIP in less than two decades into one of the standout firms in the lucrative private investment industry. With just 400 people, his infrastructure investment outfit had grown to hold $106bn in assets including stakes in airports in Sydney and London, ports, green energy and large pipelines.

Fink’s challenge was to convince the publicity shy Ogunlesi that his teams would thrive inside a 20,000-employee behemoth whose every move comes under a microscope, but the dinner was an unqualified hit. Fink called Martin Small, BlackRock’s chief financial officer, from his mobile phone shortly afterwards.

“That felt like my breakfast with Stan O’Neal and the menu,” he said, referring to a meeting with the then Merrill Lynch chief executive and the prop they used to sketch out plans for BlackRock’s 2006 acquisition of Merrill’s investment management business for more than $9bn, its first big deal.

For his part Ogunlesi told Raj Rao, GIP’s president, that he wanted to get the deal done.

Fink and Ogunlesi, who met when they worked at First Boston before it was bought by Credit Suisse in the 1980s, shared a vision that infrastructure investments would be what Small called “the fastest-growing part of the private markets” in the coming years.

They also believed that private capital, an industry started decades ago by small teams of mercenary dealmakers, was entering a phase of consolidation in which size, resources and the ability to win access to the world’s largest companies would be paramount.

Fink told analysts on Friday that the combination would feed and meet growing demand for infrastructure from sovereign wealth funds and rich individuals. “BlackRock and GIP will be able to connect our clients with bigger and better opportunities while also accelerating growth, diversifying revenues and generating earnings for our shareholders,” he said. “We could not be more excited.”

Deal talks began straight after the October dinner, with BlackRock giving its target the code name of “Apple” and GIP dubbing the larger firm “Banana”.

They moved at warp speed: by Thanksgiving at the end of November, the leaders had reached a handshake agreement that would see BlackRock buy all of GIP for $12.55bn in cash and stock. In December, top BlackRock managers hosted their GIP counterparts at the larger firm’s Hudson Yards headquarters. The “camaraderie” gave the evening gathering the feel of a Thanksgiving dinner, Small said.

The firms are no strangers. BlackRock is an investor in some GIP funds, and the two have competed for deals. As Fink built BlackRock into a force in traditional asset management, Ogunlesi rose to head investment banking at Credit Suisse before founding GIP in 2006 with a group of other alumni of the now-defunct bank, who will also join BlackRock.

The GIP purchase will immediately double BlackRock’s management fees from private markets, underscoring that Fink has found the headline grabbing deal he has been seeking.

“Transformative M&A has arrived,” Jefferies analyst Dan Fannon wrote in a note. Rao told the Financial Times that the deal would enable GIP “to take infrastructure to the top of the agenda for a wider world of investors and, at the same time, offer current investors a quantum leap in terms of a broader range of products and solutions”.

Still, as a publicly traded asset manager, BlackRock had to balance the need to retain and motivate GIP’s top talent with the interests of its shareholders.

The compromise it struck was that BlackRock would receive 100 per cent of the management fees on GIP funds, as well as 40 per cent of the performance fees from all future funds. GIP employees would retain 100 per cent of the carried interest in its existing funds and those it is raising.

BlackRock is also paying most of the $12.5bn purchase price in stock, handing GIP’s six founders 7mn shares now and 5mn more in five years. The six plan to share some of that with employees as part of a retention package. Collectively, the GIP team will become BlackRock’s second-largest shareholder, tethering them to the continued success of its new owner.

The deal’s impact will be felt across the private capital sector, forcing other prominent independently-owned firms to consider whether they too need a partner or the extra financial muscle of a public stock listing.

Private equity groups including CVC Capital Partners and General Atlantic have prepared plans to go public in what dealmakers predict will be a second wave of listings following the crisis-era floats of Blackstone, Apollo, KKR and Carlyle.

By bringing in public shareholders or combining with larger organisations, the private equity groups hope to expand in areas like debt, or infrastructure investment that are seen as beneficiaries of higher interest rates and beyond corporate buyouts, which have slowed as financing costs have surged.

Asset managers including Franklin Templeton and T Rowe Price have also been snapping up private markets specialists as they seek to counteract the growth of ultra-low fee index funds.

Rapidly rising interest rates have turned many investors cautious, stemming commitments to new funds and slowing the deployment of existing ones, creating new reasons for independent firms to consider finding larger partners.

Money managers who hope to capitalise from the expected flow of money from rich individuals into private markets will need to invest heavily in new products and distribution networks as well as pouring money into technology to deal with the impact of developments in artificial intelligence.

For BlackRock, the big question is whether this deal can finally unlock a sector where it has long struggled to gain heft.

“Our acquisition philosophy has always been about growth,” Fink told analysts. With GIP, “I truly believe that this will be the case again,” he said.

BlackRock’s shareholders and its entire industry have billions of dollars riding on whether he is right.