Adebayo Ogunlesi, chairman and CEO of Global Infrastructure Partners (GIP)and a former executive at Credit Suisse, is set to become a member of BlackRock’s board and global executive committee in exchange for $12.5 billion.
This signifies BlackRock’s power play, catapulting itself as the world’s largest independent infrastructure manager.
According to the statement on Friday, BlackRock will acquire GIP for a total consideration of $3 billion of cash and approximately 12 million shares of BlackRock common stock.
“The GIP management team, led by Bayo Ogunlesi and four of its founding partners, will lead the combined infrastructure platform. They will bring with them a talented investment, and operationally focused business improvement teams with a strong track record of building and running high-performing private markets businesses,” the statement said.
It said the acquisition of GIP, which manages $100 billion, is the biggest deal in more than a decade for BlackRock and a major step by Laurence D. Fink, BlackRock Chairman and CEO to up the game of the firm into a key player in the growing market for private and alternative assets.
“Infrastructure is one of the most exciting long-term investment opportunities, as several structural shifts reshape 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,” said Fink.
“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 has made it 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,” he added.
According to Bloomberg, Fink, 71, built BlackRock largely on the back of a bet that investors big and small would take cheaper access to investing in indexes of public companies rather than pay stock-pickers.
The deal for GIP marks a new conviction that the biggest institutions will pay higher fees to put money to work in illiquid funds that back major, complex projects.
