The unexpected entry of the world's largest asset manager, BlackRock, as a major shareholder in Spanish gas company Naturgy with 20% of the capital has caused a stir in the political and financial world, while the controversy surrounding the purchase still reverberates. of up to 9% of Telefónica by the public company Saudi Telecom.
In this case, the American manager, who moves $9.42 billion (€8.64 billion) of his clients' money on the markets, had indirect access to Naturgy through its January 12 purchase of Global Infrastructure Partners (GIP ). , the world's largest independent infrastructure manager with more than $100 billion in assets under management. Until the time of the takeover, GIP owned this 20% of the capital – worth almost 5,000 million euros – of the gas company chaired by Francisco Reynés.
BlackRock is known for being the world's largest stock investor. On the Spanish market it has assets worth more than 24,000 million euros, representing almost 4% of the capitalization of the companies in the Ibex 35 index. It is present in 19 of the 35 companies in the selective stock market, underlining its weight in the energy sector. It appears to own 5.39% of the capital of Iberdrola – behind only Qatar Investmen Authority with 8.69% – 5.42% of Enagás, 4.99% of Redeia and owns 5.47% of the shares of the oil company Repsol. Its tentacles also extend to banks, construction companies and Spanish stock market infrastructure.
The American manager has had a long-standing interest in energy and infrastructure. Rich Kushel, the director in charge of BlackRock's portfolio management team, noted in a recent statement that the firm has invested more than $320 billion (€293.6 billion) in public energy companies, including investments in traditional energy sectors such as oil and Gas as well as renewable energy energies. “We are also investing in projects such as pipelines, generation facilities and new technologies and innovations that will help boost the global economy now and in the future,” he emphasized. And on the list of the manager's 25 largest holdings worldwide are the oil companies Chevron, in which he owns 7.02% of the capital, and Exxon Mobil with 6.83%. The big bets are, of course, on technology stocks like Apple, Microsoft, Amazon and Google.
Given these gigantic numbers that the company, founded in 1988 by its current president Larry Fink, moves, it is widespread to believe that it is the owner of this huge fortune in the markets. But it is not like that. BlackRock makes these investments with the money that its customers (individuals and institutions) put into its very long list of mutual funds, many of which are passively managed and limited to tracking the performance of the indices. In order to achieve the same profitability as the indices, they buy the stocks and achieve these impressive percentages of the company's capital, as is the case with other managers such as their main competitor Vanguard.
Ignacio Cantos, Investment Director Partner at atl Capital, believes that GIP's recent purchase is different from the positions they have for their passively managed exchange-traded mutual funds (ETFs), which are aimed at tracking the indices. “Although BlackRock has a large share of the capital, in the case of passive funds it usually has no influence on the development of the company, they do not exercise their voting rights and do not appoint their representatives to the boards of directors.” And he adds: “In the case “From GIP and therefore also at Naturgy, things are different and they will influence and retain the two directors that the infrastructure manager they took over already had,” he explains. BlackRock's chief operating officer, Ron Goldstein, noted in a recent interview that the Spanish government should not be “fearful” about its 20% stake in Naturgy. Reynés himself recognized that BlackRock is an investor who provides stability to companies.
However, the purchase of GIP represents a change, as BlackRock wants to create a large infrastructure group after taking over GIP and will pay 12.5 billion dollars (11.46 billion euros) for this – the majority of it through shares of the manager himself retained the old management team. And the result will be a total deal of 150,000 million dollars, to which BlackRock will contribute 50,000 million of its clients' infrastructure assets under management. In addition to Naturgy, GIP has interests in 40 companies including airports (Gatwick, Edinburgh and Sydney airports); data centers (CyrusOne); Water (Suez), renewable (Clearway, Vena and Atlas) or railway companies (Pacific National and Italo). In addition, BlacRock recently announced the purchase of 20% of the Spanish company Recurrent Energy, owned by Canadian Solar, for 500 million euros, which will be used to further develop the renewable company.
More income
In a recent report, the American bank Goldman Sachs, in the rush to buy GIP, supports this operation and sticks to its recommendation to buy BlackRock shares. He believes this entry into more illiquid markets such as venture capital improves overall commission income, which is under severe pressure in the fund world due to intense competition, particularly in passive management. Commissions for BlackRock's unlisted businesses, such as lending and infrastructure, would rise to 11% of total income under this approach, compared to the current weighting of 6%.
The American manager justifies the creation of this conglomerate by believing that infrastructure will be one of the fastest growing segments of the private sector in the markets in the coming years, and also argues that these investments in the United States require private capital will be in view of large national deficits. Curiously, BlackRock's origins go back to a fund manager in the late 1980s who invested exclusively in bonds. Two milestones were decisive for the step into the world of stocks, which now represent slightly less than the 8.46 billion euros that the American company manages. In 2006, the company acquired Merrill Lynch Investment Managers, which specializes in variable income. The other crucial step was the purchase of Barclays Global Investors in 2009, the then market leader in the ETF business.
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