The latest development of BlackRock acquiring Global Global Infrastructure Partners (GIP), potentially creating an infrastructure fund manager with more than US$150bn in assets under management illustrates 2 interesting trends in an increasingly mature industry:

• the increasing attractivity of Infrastructure for large asset managers, as highlighted by Laurence D Fink, BlackRock Chairman and CEO: “Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy,”, this assessment echoing the persistent infrastructure financing gap, itself due to a global need for infrastructure combined with high public debt and deficits constraining government spending .
• and the tendency to acquire and regroup existing players in order to reach a bigger, critical size so as to create comprehensive global infrastructure franchises (“Mega-funds”) and provide platforms for diversified, large-scale sourcing to support deal flow and co-investment opportunities for clients .

Neveretheless, we believe there is still a case for smaller, thematic infrastructure funds remain, for instance in Energy transition , as supported by our latest Energy transition: Implications for Infrastructure investors report, which argues that it makes sense to have specialized energy transition strategies/platforms alongside generic infrastructure strategies.