BlackRock, the world’s largest asset manager, has announced that it will acquire Global Infrastructure Partners (GIP), a leading infrastructure investment firm, for $12.5 billion. This deal will create a combined platform with over $200 billion of assets under management in the infrastructure sector, spanning renewable energy, transportation, digital infrastructure and more.
What does this mean for the fintech industry in Nigeria? Here are some possible implications.
More capital and expertise for local fintech startups: BlackRock and GIP have a track record of investing in and supporting innovative companies in emerging markets, especially in the fintech space. For example, BlackRock is an investor in Flutterwave, a Nigerian payment platform that recently raised $170 million at a $1 billion valuation.
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GIP is an investor in Cellulant, a Nigerian digital payments company that operates in 18 African countries. With the acquisition of GIP, BlackRock will have access to more infrastructure assets and expertise that could benefit local fintech startups, such as providing connectivity, data centers, cloud services and renewable energy.
More opportunities for collaboration and partnerships: The acquisition of GIP will also expand BlackRock’s network and reach in the infrastructure sector, creating more opportunities for collaboration and partnerships with other players in the ecosystem. For instance, BlackRock is a partner of Microsoft, which recently launched its first data center in Africa, located in Nigeria.
Microsoft also offers cloud services and solutions for fintech companies, such as Azure, Dynamics 365 and Power Platform. By working together, BlackRock and Microsoft could leverage their respective strengths and resources to support the growth and innovation of the fintech industry in Nigeria.
More competition and consolidation in the market: The acquisition of GIP will also increase the competition and consolidation in the infrastructure and fintech sectors, as other players will seek to match or challenge BlackRock’s scale and capabilities. For example, Brookfield Asset Management, another global infrastructure investor, recently acquired a majority stake in Oaktree Capital Management, a leading alternative investment firm.
Brookfield also has investments in African infrastructure and fintech companies, such as Helios Towers, Africa’s largest independent telecom tower operator, and Jumo, a South African fintech platform that provides credit and savings products to millions of customers. As the market becomes more crowded and competitive, we may see more mergers and acquisitions among infrastructure and fintech players in Nigeria and beyond.
What is the impact of this acquisition on other sectors? Here are some possible effects.
More investment and development in other sectors: The acquisition of GIP will also enable BlackRock to invest in and develop other sectors that are related to or dependent on infrastructure, such as agriculture, health care, education and entertainment.
For example, BlackRock is an investor in Andela, a Nigerian company that trains and connects software developers across Africa with global companies. GIP is an investor in MainOne, a Nigerian company that provides broadband connectivity and data center services across West Africa. With the acquisition of GIP, BlackRock will be able to support these companies and others that are creating value and impact in other sectors through infrastructure.
More innovation and diversification in other sectors: The acquisition of GIP will also inspire more innovation and diversification in other sectors that are looking to leverage infrastructure to improve their products and services. For example, BlackRock is an investor in Zipline, a US company that uses drones to deliver medical supplies in remote areas.
GIP is an investor in Bridge International Academies, a Kenyan company that operates low-cost private schools across Africa. With the acquisition of GIP, BlackRock will be able to encourage these companies and others that are using infrastructure to enhance their offerings and reach new markets.
More challenges and opportunities for other sectors: The acquisition of GIP will also pose some challenges and opportunities for other sectors that are competing or collaborating with infrastructure players. For example, BlackRock is an investor in Uber, a US company that provides ride-hailing services around the world.
GIP is an investor in Gatwick Airport, a UK airport that serves millions of passengers every year. With the acquisition of GIP, BlackRock will have to balance its interests and responsibilities across different modes of transportation and mobility. At the same time, BlackRock will have to seize the opportunities that arise from the convergence of infrastructure and other sectors.
Global Infrastructure Partners (GIP) is a leading infrastructure investor that specializes in investing in, owning and operating some of the largest and most complex assets across the energy, transport, digital infrastructure and water and waste management sectors. With decarbonization central to our investment thesis, we are well positioned to support the global energy transition. Headquartered in New York, GIP has offices in Brisbane, Dallas, Delhi, Hong Kong, London, Melbourne, Mumbai, Singapore, Stamford and Sydney. GIP has approximately $103 billion in assets under management. Our portfolio companies have combined annual revenues of approximately $75 billion and employ over 115,000 people.
We believe that our focus on real infrastructure assets, combined with our deep proprietary origination network and comprehensive operational expertise, enables us to be responsible stewards of our investors’ capital and to create positive economic impact for communities. For more information, visit www.global-infra.com.