BlackRock has entered into a definitive agreement to acquire First Reserve Energy Infrastructure Funds (FREIF), the equity infrastructure franchise of First Reserve, a global private equity firm exclusively focused on energy. The Energy Infrastructure team will join BlackRock’s Infrastructure Investment platform.
The Energy Infrastructure team at First Reserve manages approximately $3.7 billion in committed capital across two funds with a global investment footprint, including investments in North America, Latin America, Europe and Southeast Asia. Led by Mark Florian, the team has announced or closed 21 portfolio companies since 2010, almost all negotiated on an exclusive basis. The global team of 37 investment professionals and support staff will join BlackRock when the deal closes, providing for continuity of strategy and portfolio management.
As part of the BlackRock Infrastructure platform, the Energy Infrastructure 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. Further, the team will 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.
BlackRock’s Infrastructure platform will manage approximately $14 billion in client assets when the transaction closes. Backed by BlackRock’s market-leading risk management, the Infrastructure platform provides access to sectors and geographies undergoing fundamental change, where BlackRock sees opportunity to create value for investors.
The transaction is subject to customary closing conditions and is expected to close by the end of the second quarter of 2017. The financial impact of the transaction is not material to BlackRock earnings per share. Terms were not disclosed.
Mark McCombe, Global Head of BlackRock Alternative Investors, stated:
“Six years ago, we set out to create one of the leading infrastructure investment platforms in the world. Since then, we’ve built world class franchises in Renewable Power and Infrastructure Debt and leading Latin American Infrastructure and Infrastructure Solutions businesses. The global energy infrastructure market presents a unique investment opportunity for clients seeking uncorrelated sources of return with attractive yields.”
Alex Krueger, President and Co-CEO of First Reserve commented,
“We are pleased that a global organization of BlackRock’s quality has acknowledged the work of First Reserve and the FREIF team. We believe this acquisition by BlackRock will serve the FREIF platform and its investors well. First Reserve is committed to making this a smooth transition for our investors, and will remain devoted to pursuing attractive opportunities throughout the energy value chain through our private equity funds.”
Jim Barry, Global Head of BlackRock’s Real Assets Group, added,
“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.”
Mark Florian, Head of First Reserve Energy Infrastructure Funds, said,
“Given our past work together and their success in building out the Infrastructure platform, we believe that a transition to BlackRock can provide the perfect place to take our energy infrastructure franchise to the next level. We are excited that FREIF’s investors will be able to receive ongoing, long-term benefit from what we believe are complementary strengths, augmenting the team’s energy infrastructure expertise with BlackRock’s world-class capabilities and global network.”