BlackRock on Friday announced a $12.5 billion acquisition of Global Infrastructure Partners in a major bet on alternative assets and announced a management shakeup.
The deal includes $3 billion in cash and 12 million BlackRock shares, and will put the asset management giant at the center of investments in port, power and digital infrastructure projects around the world.
Once the deal closes, the company will have approximately $150 billion of infrastructure assets across its portfolio, ranging from the U.S. liquefied natural gas export market to wastewater services in France to airports in the United Kingdom and Australia.
The asset class is growing in popularity among institutional investors as demand for logistics and digital infrastructure soars, and trillions of dollars are needed to transition away from high-carbon energy.
“Infrastructure represents one of the most exciting long-term investment opportunities as a number of structural changes reshape the global economy,” said CEO Larry Fink.
BlackRock, which manages $10 trillion across markets, has been seeking what it hopes will be a transformative deal as profits slump and its environmental, social and corporate governance businesses come under political attack in the United States. .
“this is [Fink’s] “It's an opportunity to put our final fingerprints on the company,” said Kyle Saunders, an Edward Jones analyst who rates the stock a “buy,” adding that companies like Blackstone Inc. and Apollo Global Management Inc. It is said that the company will be able to compete with
Founded in 2006, GIP manages over $100 billion in assets, with a portfolio that includes Gatwick Airport, the Port of Melbourne and major offshore wind projects in the UK.
management change
BlackRock also announced changes to its senior management team amid mounting speculation about who will succeed Mr. Fink, who founded BlackRock in 1988.
Steven Cohen will become chief product officer and lead a new global product strategy group, while Salim Ramzi, global head of iShares and index investing, will step down, according to an internal memo seen by Reuters.
BlackRock is also building a new international business structure under Rachel Lord to lead Europe, the Middle East, India and Asia Pacific, the memo said.
Five of GIP's founding partners will join BlackRock, including GIP Chairman Bayo Ogunlesi, who will join BlackRock's board of directors upon completion of the transaction.
Goldman CEO David Solomon announced Friday that Mr. Ogunlesi will resign from Goldman Sachs' board to join BlackRock.
CFRA analyst Kathy Seifert said the deal adds “another candidate” to the list of candidates to replace Mr. Fink, who is 71 years old and has not yet named his final successor. do not have.
“As alternative assets become an increasingly important part of BlackRock's business mix, the private assets skill set of our next leader will become even more important,” she said.
profit beat
BlackRock also reported an 8% increase in quarterly profit as assets under management increased due to market recovery.
Hopes for a soft landing for the U.S. economy — a scenario in which inflation eases without a spike in unemployment — have buoyed markets in recent months.
The dovish tone of the US Federal Reserve, which has kept interest rates on hold since July, also boosted sentiment, with BlackRock ending the quarter with $10.01 trillion in assets under management (AUM), down from a year earlier. That's up from $8.59 trillion.
On an adjusted basis, BlackRock's profit for the three months ended Dec. 31 was $1.45 billion, or $9.66 per share, compared with $1.36 billion, or $8.93 per share, in the year-ago period. Ta.
Analysts' average estimate was for earnings of $8.84 per share, according to LSEG data.
The company's stock fell 0.4% on Friday, while the S&P 500 index rose about 0.3%.
