GIP, owner of Gatwick and Edinburgh airports, sold to US BlackRock asset management
Global Infrastructure Partners (GIP), which owns about £79bn of companies including Gatwick airport and the Suez wastewater group, has been sold to the US investment firm BlackRock in a $12.5bn deal. The takeover will make BlackRock the world’s 2nd-largest infrastructure investor, behind Australia’s Macquarie group. GIP was created in 2006, and has bought crumbling assets in the energy, transport and water industries, before fixing them and selling them on at a good profit. It now owns 40 companies generating more than $75bn in annual revenues. In the UK, its portfolio includes Gatwick, where it is a minority shareholder behind Vinci; it owns Edinburgh airport, bought in 2012; a stake in Peel Ports, which owns seven ports, and Hornsea 1, the project to build the world’s largest offshore windfarm in the North Sea. GIP bought City airport for £760m in 2006, and sold it to a Canadian-led consortium for £2bn in 2016. GIP’s bosses will now run BlackRock’s enlarged infrastructure business. BlackRock hopes to capitalise on a global acceleration in government infrastructure spending, which it hopes will boost their domestic economies.
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Sale of UK assets to world’s largest money manager means huge payday for bankers
Global Infrastructure Partners, whose portfolio includes Gatwick, sold to BlackRock in $12.5bn deal
By Alex Lawson (Guardian)
Fri 12 Jan 2024
From the humble luggage tray to filters that mask smells at sewage plants, the sale of some of Britain’s most pedestrian assets to the world’s largest money manager is to bring a multimillion-dollar payday to a small clutch of little-known bankers.
Global Infrastructure Partners (GIP), which boasts a $100bn (£79bn) collection of companies including Gatwick airport and the Suez wastewater group, has been sold to the US investment firm BlackRock in a $12.5bn deal.
The price tag puts each of GIP’s founders and partners in line for a huge payday, nearly two decades after the New York-headquartered ports-to-pipes investor was formed.
Five of the six founding partners, including the chief executive, Adebayo Ogunlesi, will join BlackRock as part of the deal. The takeover will make BlackRock the world’s second-largest infrastructure investor, behind Australia’s Macquarie group.
GIP was devised by Ogunlesi, his fellow former Credit Suisse banker Matthew Harris and Bill Woodburn, a former General Electric infrastructure chief who they lured to join them over dinner in Manhattan.
Ogunlesi, known as “Bayo”, was born in Nigeria and studied at Oxford and Harvard, before becoming the first non-American to serve as a law clerk in the US supreme court. From there he went on to become an influential dealmaker at Credit Suisse.
In Europe, the business is led by Michael McGhee, another former Credit Suisse banker and founding partner who joined GIP at its inception. He leads its transport sector industry investment teams including deals for airports, ports and freight rail. GIP has also employed the former British prime minister Sir John Major as chair of its advisory board.
The fund was started in 2006 with $500m each from General Electric and Credit Suisse, and grew quickly, snapping up crumbling assets in the energy, transport and water industries, before fixing them and selling them on.
Now, it owns 40 companies generating more than $75bn in annual revenues, with a combined workforce of 115,000 people.
In the UK, its portfolio includes Gatwick; a stake in Peel Ports, which owns seven ports, and Hornsea 1, the project to build the world’s largest offshore windfarm in the North Sea. GIP bought City airport for £760m in 2006, and sold the London hub to a Canadian-led consortium for £2bn in 2016.
BlackRock hopes to capitalise on a global acceleration in government infrastructure spending. Politicians have attempted to support infrastructure spending to boost their domestic economies, notably on renewable energy initiatives, including Joe Biden’s $369bn Inflation Reduction Act.
The chair and chief executive of BlackRock, Larry Fink, said: “Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts reshape the global economy … Policymakers are only just beginning to implement once-in-a-generation financial incentives for new infrastructure technologies and projects.”
BlackRock will pay $3bn in cash and 12m of its own shares as part of the deal to buy GIP. The 400 people directly employed by GIP will receive some of the stock.
As well as the fund’s founders and partners, the takeover represents a payday for bankers and lawyers for BlackRock and GIP when it is completed, likely between July and September. Bankers from the US financial services firm Perella Weinberg Partners are working for BlackRock, while Evercore is advising GIP.
Separately on Friday, BlackRock said its assets under management had topped $10tn for the first time since 2021. Its revenues rose 7% to $4.6bn in the final quarter of 2023.
https://www.theguardian.com/business/2024/jan/12/blackrock-buys-global-infrastructure-partners
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BlackRock agrees $12.5 billion infrastructure deal for airports
World’s largest money manager’s deal to buy Gatwick owner Global Infrastructure Partners is its biggest in 15 years
By Robert Lea, Industrial Editor (Times)
January 13 2024,
The world’s biggest investor has paid $12.5 billion for significant stakes in some of Britain’s most important airports and ports.
BlackRock, the fund manager, is to buy Global Infrastructure Partners in a deal that will include Gatwick, the UK’s second-biggest airport. The agreement will make fortunes for the bankers and financiers who created GIP nearly two decades ago and will further BlackRock’s ambition to take on Macquarie, its Australian rival, in the global infrastructure market.
Global Infrastructure manages $100 billion of assets and its acquisition is the biggest deal in more than a decade for BlackRock, the world’s biggest money manager that oversees more than $10 trillion.
GIP is best known in the UK as the beneficiary of the enforced break-up in 2009 of BAA, the old British Airports Authority, from which it acquired Gatwick airport. It remains a minority shareholder of Gatwick behind Vinci, the French group, and also owns Edinburgh airport. It was for a time also the owner of London City airport.
The infrastructure manager holds a stake in Peel Ports, whose primary asset is the Port of Liverpool. It has a stake in Suez, the French group that runs a large part of the UK waste sector and used to own Biffa. GIP was also an investor in the giant Hornsea windfarm in the North Sea.
GIP was founded in 2006 with backing from Credit Suisse, the Swiss bank, and General Electric, the US industrial group.
The main beneficiaries of the cash-and-shares deal are GIP’s six executives, who majority own the business. Under the terms of the deal — $3 billion in cash, $9.5 billion in BlackRock stock — it is estimated the GIP executives will collectively become one of BlackRock’s largest shareholders.
Adebayo Ogunlesi, 70, a former Credit Suisse executive who is GIP’s chairman and chief executive, will join the BlackRock board. He launched the firm in 2006 and was, for a time, an adviser to former US president Donald Trump.
Another big winner in the deal is Michael McGhee, 67, Manchester University-educated and formerly of Credit Suisse and BZW, who was another of the co-founders. McGhee acts as an adviser to Humza Yousaf’s Scottish government.
GIP’s bosses will now run BlackRock’s enlarged infrastructure business. Larry Fink, 71, BlackRock chairman, explained his rationale for the deal. “Infrastructure is one of the most exciting long-term investment opportunities as a number of structural shifts reshape the global economy,” he said.
“We believe the expansion of both physical and digital infrastructure will continue to accelerate as governments prioritise self-sufficiency and security through increased domestic industrial capacity, energy independence and onshoring or near-shoring of critical sectors.”
The acquisition came as BlackRock also reported an 8 per cent rise in quarterly profit, helped by a rebound in markets, ending its fourth quarter with $10.01 trillion in assets under management, up from $8.6 trillion a year earlier.
https://www.thetimes.co.uk/article/blackrock-agrees-its-biggest-deal-in-15-years-zphd6nk5s
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