By Uche Amunike
The biggest asset management company in the world, BlackRock, is set to buy a company known as Global Infrastructure Partners (GIP) and founded by Nigerian investment banker, Adebayo Ogunlesi, in a $12.5 billion deal.
According to a statement released, Friday, $3bn is to be paid in cash by Blackrock to Adebayo Ogunlesi and five other co-founders of GIP, while also offering them 12 million shares in Blackrock, making them the second biggest shareholders in the global asset management giant.
Blackrock has also announced that it would appoint Ogunlesi to the board at the next scheduled board meeting after the conclusion of the deal.
The statement partly read: ‘The combination of GIP with BlackRock’s highly complementary infrastructure offerings creates a comprehensive global infrastructure franchise with differentiated origination and asset management capabilities.’
It also explained that GIP’s acquisition agrees with the vision of its chairman and CEO, Laurence Fink to make the firm a major player in the growing market for private and alternative assets.
It further stated: ‘Over $150 billion combined business will seek to deliver clients market-leading, holistic infrastructure expertise across equity, debt and solutions at substantial scale.’
‘Marrying the proprietary origination and business improvement capabilities of GIP and BlackRock’s global corporate and sovereign relationships provides a platform for diversified, large-scale sourcing to support deal flow and co-investment opportunities for clients. We believe bringing GIP and BlackRock together will deliver to clients the benefits of broader origination and business improvement capabilities.’
According to Fink, the acquisition of GIP is one of the most exciting long term investment opportunities ever seen in a long time.
Before Adebayo Ogunlesi, who was an alumnus of Kings College, Lagos and Harvard University, established the financial giant, Global Infrastructure Partners, he was the Chief Client Officer and Vice Chairman at Credit Suisse First Boston.
After his company the Global Infrastructure Partners, bought the Gatwick Airport, it expanded his profile. Note that GIP has major assets which include the Port of Melbourne, Sydney, the Suez Water Group, a stake in a big shale oil pipeline and extensive green energy holdings.
In infrastructure, investment is seen as an alternative asset by traditional money managers like Blackrock. This deal, therefore makes BlackRock the second biggest private investor and manager of infrastructure in the world.
According to Adebayo Ogunlesi, some of the cash and shares will be shared among GIP’s 400 members of staff.
In the sphere of global private infrastructure management, Ogunlesi’s achievements have initiated reasons for discussions concerning Nigeria’s economically ruinous infrastructure deficits and his native country’s sub-standard policies and incentives to leverage into the deals-hungry world of private infrastructure investment.
In over 10 years, the vast bureaucracy in charge of private investment in infrastructure, namely, Nigeria’s Bureau of Public Infrastructure and the Nigerian Infrastructure Concession Regulatory Commission, are yet to boast of a major successful deal.
GIP has a $106bn investment in infrastructure, even as a $10tn worth of alternative assets is managed by Blackrock.