BlackRock has agreed to buy Global Infrastructure Partners (GIP) for $12.5 billion in a cash and shares deal that will make the world's largest asset manager one of the biggest players in alternative assets and private markets.
BlackRock said on Friday it would buy GIP for $3 billion in cash and roughly 12 million BlackRock shares to create an infrastructure investing platform with more than $150 billion in combined assets.
Founded in 2006, GIP manages more than $100 billion in assets and its portfolio includes Britain's Gatwick airport, the Port of Melbourne and offshore wind projects.
“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy," said BlackRock CEO Laurence Fink.
"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," Fink said.
BlackRock also announced several management changes. Stephen Cohen becomes chief product officer and will lead a new global product strategy group, while Salim Ramji, global head of iShares and index investments, is leaving, according to a company memo seen by Reuters.
The company is also creating a new international business structure under Rachel Lord to lead Europe, the Middle East, India, and Asia Pacific, the memo said.
GIP Chairman and Managing Partner Bayo Ogunlesi will join BlackRock's board of directors following closure of the deal, it added.
Profit beat
BlackRock also posted an 8% rise in quarterly profit, helped by a rebound in markets that boosted its assets under management.
Hopes of a soft landing for the U.S. economy - a scenario where inflation eases without a sharp rise in unemployment - have cheered markets in recent months.
A dovish tilt from the U.S. Federal Reserve, which has left interest rates unchanged since July, has also boosted sentiment, helping BlackRock end the fourth quarter with $10.01 trillion in assets under management (AUM), up from $8.59 trillion a year earlier.
On an adjusted basis, BlackRock earned $1.45 billion, or $9.66 per share, for the three months ended Dec. 31, compared with $1.36 billion, or $8.93 per share, a year earlier.
Analysts on average had expected a profit of $8.84 per share, according to LSEG data.