(Bloomberg) -- BlackRock Inc. will invest as much as $1 billion a year in energy and project finance assets from Banco Santander SA, signaling another step in the money manager’s growing expansion this year into infrastructure.
The move deepens a partnership with Santander that has included BlackRock investing $600 million in April into an infrastructure credit portfolio from the Madrid-based bank, according to a statement Thursday.
This new agreement will lead BlackRock, the world’s largest asset manager, to “provide long-term, flexible capital on a recurring basis to support the growth of its project finance franchise,” Vice Chairman Gary Shedlin said in the statement.
BlackRock, best known for managing stock- and bond- index funds, is expanding deeper into private assets this year, acquiring data-provider Preqin and Global Infrastructure Partners. The $12.5 billion deal for GIP, which is set to close next Tuesday, will add more than $100 billion of assets to BlackRock and vault the firm into the top ranks of infrastructure investors worldwide.
BlackRock, which managed $10.6 trillion at midyear, also teamed up last week with Microsoft Corp. and the United Arab Emirates’ MGX investment vehicle to start one of the largest efforts to date to finance data warehouses and energy infrastructure behind the boom in artificial intelligence.
The Santander deal allows the bank to offload risk and burnish its finances. In the aftermath of last year’s US regional banking crisis, private equity and credit firms and other money managers bought assets from lenders seeking to boost their liquidity.
Shedlin said in an interview last year that he expected banks to unload assets because of the challenges of higher interest rates, capital regulations and potential industry consolidation.
In October, BlackRock struck an agreement with SoFi Technologies Inc. on a $375 million securitization of personal loans.
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