Bayo Ogunlesi GIP $12.5bn BlackRock deal to shape $15trn global infra space

* BlackRock to expand private assets

Onome Amuge, with wire reports

The global infrastructure space with its estimated investment requirement of $15 trillion has a new actor which could shape developments in it. This follows the expected unleashing of the combination of BlackRock Inc., the world’s largest asset manager with an estimated $9.42 trillion in assets as of 2023, and Global Infrastructure Partners (GIP), a leading global infrastructure investment firm, after the latter was acquired by BlackRock in a deal worth $12.5 billion. 

GIP has Adebayo Ogunlesi, Nigerian born investment banker, as chairman who is now expected to join Black Rock for what many analysts see as interesting times ahead in the infrastructure investment space.

Monitored wire reports indicate that the acquisition of GIP by BlackRock gives the asset manager a unique opportunity to become a major player in the global infrastructure investment space. The deal will expand BlackRock’s ability to offer clients a broader range of long-term investments in areas such as energy, transportation, and digital infrastructure.

Adebayo Ogunlesi is a well-known Nigerian businessman and investment banker who has played a major role in the global infrastructure investment space. 

As the chairman and chief executive officer of GIP, he led the company’s growth from a startup to a global leader, with a portfolio of over $100 billion in assets under management.

BlackRock’s acquisition of GIP,  sealed with $3 billion in cash and approximately 12 million BlackRock shares valued at $9.5 billion, is the company’s largest deal in more than a decade, and it highlights the importance of infrastructure investment as a key area of growth for the global economy.

Ogunlesi’s role in the creation of GIP has been instrumental in shaping the infrastructure investment landscape. Ogunlesi, who previously worked at GE and Credit Suisse, has been a pioneer in the industry, and GIP’s success has been a testament to his vision. The firm’s portfolio includes major projects such as London’s Gatwick Airport, the Indiana Toll Road, and the Trans Mountain Pipeline, among others. GIP’s assets generate annual revenues in excess of $80 billion, illustrating the significant impact that the firm has had on infrastructure development around the world.

As a result of the deal, Ogunlesi will be joining BlackRock’s board of directors and global executive committee, bringing his knowledge and expertise to the company’s top leadership team. Ogunlesi’s appointment is part of a broader management shuffle at BlackRock, which is being led by CEO Larry Fink.

According to Fink and Rob Kapito, BlackRock president, the need for new and upgraded infrastructure is being driven by a number of factors, including the growing reliance on digital technologies, the need for improved logistics and supply chains, and the transition to a low-carbon economy. The duo are optimistic that infrastructure investment will be a major driver of growth in the private capital industry in the coming years. The industry is already growing rapidly, and the growing demand for infrastructure is expected to accelerate this growth.

The acquisition of GIP is an important strategic move for BlackRock, which is seeking to expand its range of investment solutions and become a comprehensive asset manager. GIP is well-known for its expertise in managing large-scale infrastructure projects, and its portfolio includes major assets such as ports, airports, and power plants. Although alternatives currently account for a small portion of BlackRock’s assets under management, they are an important source of revenue, contributing approximately 10 percent of the company’s fees.

By combining GIP’s $100 billion in assets under management with BlackRock’s existing infrastructure assets, the company is creating a formidable competitor in the infrastructure investment space. GIP’s expertise in the sector, combined with BlackRock’s global reach and resources, will make the combined entity a major player in the industry. The move also reflects the company’s recognition of the need for significant investment in infrastructure over the next decade. 

According to estimates, up to $15 trillion of infrastructure investment will be required globally by 2030, creating a major opportunity for asset managers like BlackRock. The acquisition of GIP is a major step forward for BlackRock as it seeks to expand its presence in the private and alternative assets space. The deal is expected to be completed by the third quarter of this year, and it will significantly boost BlackRock’s ability to offer a range of private and alternative assets to its clients.