Upgrading Global Digital Infrastructure With BlackRock & GIP
Multinational investment company BlackRock has acquired Global Infrastructure Partners (GIP) to accelerate increased digital infrastructure developments.
An acquisition of this scale positions BlackRock as one of the largest infrastructure investment firms in the world. The company boasts more than US$50bn of infrastructure client assets, in areas including diversified infrastructure, infra debt, infra solutions, climate infrastructure and decarbonisation partners.
GIP is a private equity company with stake in notable data centre companies CyrusOne and Vantage Towers. BlackRock’s US$12.5bn cash deal aims to substantially shake up the landscape for private market investing and commit further to digital transformation efforts.
‘Transforming the power grid’
GIP is a leading infrastructure investor that specialises in investing in, owning and operating some of the largest and most complex assets across energy, transport, digital infrastructure and water and waste management sectors. With decarbonisation at the centre of its investment strategies, the organisation is well positioned to support the global energy transition.
The company has continually invested in data infrastructure that includes data centres, communications networks, wireless access sites and tech-enabled infrastructure. It highlights these areas as critical to the infrastructure of the modern global economy, in addition to daily life.
BlackRock has already invested US$320bn into public energy companies, including investments in both traditional energy sectors like oil and gas and in renewables.
With the infrastructure market currently sitting around US$1tn, according to BlackRock, it is no secret that the sector is expected to be one of the fastest growing in 2024. Plenty of trends are already contributing to an acceleration in infrastructure investment, including an increased demand for upgraded digital infrastructure like fibre broadband, cell towers and data centres.
Additionally, there is a greater business movement towards decarbonisation and energy security worldwide, with organisations committed to reviewing their environmental, social and corporate governance (ESG) strategies.
“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy,” says Laurence D. Fink, Chairman and CEO of BlackRock. “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.”
See further insights from Fink below:
Investing a focus on sustainability and digital transformation
The GIP management team, led by company Founding Partner, Chairman and CEO, Adebayo Ogunlesi, will oversee the combined infrastructure platform. Ogunlesi’s team will bring with them talented investment, and operationally focused business improvement teams with a strong track-record of building and running high-performing private markets businesses.
The company is expecting that the integration with BlackRock’s platform will generate greater opportunities for expanding digital infrastructures worldwide.
With the data centre market continuing to rapidly expand in 2024, given the demand for new technologies, business needs are evolving. Increasing numbers of global organisations are having to innovate to keep pace with the growing importance of reliable, scalable and secure data infrastructure.
Likewise, this unprecedented growth is paving the way for more sustainable solutions within the industry. With data centres already accounting for 2% of greenhouse gas emissions (as reported in 2023), many companies are already striving to meet their sustainability goals, via solutions for waste heat, energy efficiency and construction.
An acquisition and company merger of this scale by BlackRock and GIP is sure to showcase myriad benefits and solutions to support the digital economy in 2024. Translating this to the data centre industry would provide plenty of opportunities for businesses to scale and meet demand in a safe, environmentally-conscious way.
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