The shot in the arm the Trump era has given to infrastructure’s potential is capturing investors' attention with BlackRock announcing it has acquired an energy infrastructure unit from private equity firm First Reserve.
The deal will see the US fund giant acquire the firm's First Reserve Energy Infrastructure Funds, which includes an investment team that manages $3.7 billion (€3.42 billion) in capital across two funds invested in North America, Latin America, Europe and Southeast Asia.
The 37-person team, lead by Mark Florian, will join BlackRock's infrastructure platform once the deal is closed by the second quarter of this year, bringing the platform's total client assets up to $14 billion (€13 billion).
The arrival of the new team comes in an environment of heightened interest in the sector following proposals by US president Donald Trump to spend as much as $1 trillion on infrastructure.
This deal will allow BlackRock to expand its infrastructure offering and potentially capitalise on any opportunities this massive spending increase will create.
The new team plans to continue its strategy of targeting equity investments in projects and companies with contracted revenue, visible yield streams and long-term capital appreciation.
It will also continue to act as a strategic partner to its portfolio companies, management teams and counterparties through investments in four core sectors: contracted power, contracted midstream, other contracted energy assets and regulated transmission and distribution.
Commenting on the deal, Jim Barry, global head of BlackRock’s real assets group, said: 'The development of a Global Energy Infrastructure platform has been a strategic priority for BlackRock.
'The team from First Reserve has a strong reputation in the energy infrastructure industry and their investment strategy strongly complements our existing capabilities. Additionally, having worked together on recent transactions, we have found a strong cultural fit.'