BlackRock is now turning its focus towards infrastructure. Business

The unexpected entry of BlackRock, the world’s largest asset manager, as the main shareholder of the Spanish gas company Naturgy with 20% of the capital has caused a stir in the political and financial worlds with controversy over the purchase. 9% of Telefónica by the public company Saudi Telecom.

In this case, the US manager, which moves $9.42 billion (8.64 billion euros) of its clients’ money across the markets, indirectly gained access to Naturgy as a result of its purchase from Global Infrastructure Partners (GIP) on December 12. Was. The world’s largest independent infrastructure manager with more than $100 billion in assets under management. Until the moment of the acquisition, GIP owned 20% of the capital – valued at approximately 5,000 million euros – of the gas company headed by Francisco Raines.

BlackRock is known as the world’s largest investor in stocks. Its assets in the Spanish market exceed 24,000 million euros, representing approximately 4% of the capitalization of the companies in the Ibex 35 index. It is present in 19 out of 35 companies in the selected stock market and its weight is different. In the energy sector. It appears as the owner of 5.39% of Iberdrola’s capital – trailing only Qatar Investment Authority with 8.69% –, 5.42% of Enagas, 4.99% of Radia and 5.47% of the shares of the oil company Repsol. Its network also extends through banks, construction companies and the infrastructure of the Spanish stock market.

US managers have a long-standing interest in energy and infrastructure. Rich Kushel, the director responsible for BlackRock’s portfolio management team, said in a recent statement that they have invested more than $320 billion (€293.6 billion) in public energy companies, including investments in traditional energy sectors such as oil and gas. Is included. energy. “We also invest in projects like pipelines, production facilities and new technologies and innovations that will help drive the global economy now and into the future,” he stressed. And in the list of the manager’s 25 largest holdings in the world are oil companies Chevron, which owns 7.02% of the capital, and Exxon Mobil with 6.83%. Of course, its big bets are on tech stocks like Apple, Microsoft, Amazon and Google.

With the company founded in 1988 by its current Chairman Larry Fink putting forward these huge figures, it is common to believe that it owns this huge asset in the markets. but it’s not like that. BlackRock makes these investments with money that its clients (individuals and institutions) have put into its very long list of investment funds, many of them passively managed that limit themselves to mimicking the growth of indices. Are. To achieve the same profitability as the indices, they buy shares and acquire these impressive percentages of the companies’ capital, as is the case with other managers such as its main competitor, Vanguard.

Ignacio Cantos, investment director partner at ATL Capital, believes that GIP’s recent purchase is different from the positions that exist for their exchange-traded investment funds (ETFs) with passive management that are dedicated to mimicking indices. “Although BlackRock has access to a large portion of the capital, when it comes to passive funds, they usually have no influence on the company’s progress, they do not exercise their voting rights or put their representatives on the board of directors. Don’t keep it.” And he adds: “In the case of GIP and, therefore, Naturgy, things are different and the two directors who have already acquired the infrastructure manager will influence and retain it,” he explains. Ron Goldstein, BlackRock’s director of operations, told reporters in a recent interview that the Spanish government should not be “afraid” to sell its 20% stake in Naturgy. Ryans himself acknowledged that BlackRock is an investor that provides stability to companies.

However, the purchase of GIP represents a change, as BlackRock wants to create a larger infrastructure group after absorbing GIP, for which it will pay $12.5 billion (11.46 billion euros), the majority of it in manager shares. It will happen only through. – And will retain the old management team. And that would result in a combined business of $150 billion, a figure that contributes to BlackRock’s $50 billion in client infrastructure assets under management. In addition to Naturgy, GIP has stakes in 40 companies such as airports (Gatwick, Edinburgh and Sydney airports); Data Center (CyrusOne); Water (Suez), renewables (Clearway, Vena and Atlas) or railways (Pacific National and Italo) businesses. Additionally, BlackRock recently announced the purchase of a 20% stake in Canadian Solar-owned Spanish company Recurrent Energy for 500 million euros, which will be used to develop the company’s progress in renewables.

higher income

US bank Goldman Sachs, in a recent report in the heat of GIP purchases, supports this operation and retains its buy recommendation for BlackRock shares. He believes this entry into more liquid markets such as venture capital improves overall commission income, which is under considerable pressure due to strong competition in the fund world, especially in passive management. Commissions on BlackRock’s unlisted businesses, such as credit and infrastructure, would rise to 11% of total income for this concept, compared to the current weighting of 6%.

US managers justify the creation of this group because they anticipate that infrastructure will be one of the fastest growing sectors of the private sector market in the coming years and they also argue that these investments will require private capital. Large government deficits… Interestingly, BlackRock originated in the late eighties as a fund manager dedicated exclusively to investing in bonds. The two milestones were significant in the move to the world of stocks which now represents just under 8.46 billion euros managed by the US firm. In 2006 it acquired Merrill Lynch Investment Managers specializing in variable income. The second decisive step was the purchase of Barclays Global Investors in 2009, which was the leader in the ETF business at the time.

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