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Blackstone looks to ‘expand further’ into infrastructure

The private equity firm has invested in various infrastructure assets in recent years including cell towers, a natural gas export facility and a transmission line.

The Blackstone Group is considering ways to “expand further” into the infrastructure asset class, a source familiar with the matter confirmed to Infrastructure Investor.

A report published on Monday by the Wall Street Journal said the New York-based private equity firm is exploring a new infrastructure business.

Blackstone has invested in infrastructure assets in recent years from its energy funds and other structures . However, launching a dedicated infrastructure platform – if Blackstone took this course – would make it the latest high-profile investment manager looking to raise funds from institutional investors seeking more exposure to the sector.

There were record-breaking fundraises for the asset class this year, led by Brookfield Asset Management’s $14 billion close on its third infrastructure fund and Global Infrastructure Partners reportedly nearing a close of almost $16 billion on its latest vehicle.

Institutional capital’s appetite for infrastructure has been growing steadily over recent years, in part because projects provide stable and recurrent yield that mainstream assets at the lower end of the risk spectrum are struggling to produce.

Blackstone itself has stepped up its infrastructure game over the past few years, snapping up assets including mobile towers in the US and Brazil, a natural gas export facility in Louisiana, a transmission line from New York to Quebec and a hydroelectric dam in Uganda.

Another factor buoying the infrastructure industry is the prospect of fresh privatisations and increased government spending under the incoming Trump administration. President-elect Donald Trump has promised to invest heavily in US infrastructure and has pointed to the private sector as one way to help fund his plans.

Trump has selected Blackstone chief executive Steve Schwarzman to serve as chair of a board that will advise the president-elect on how to make business and government policy fruitfully intersect. GIP chairman Adebayo Ogunlesi has also been chosen to sit on the board.

Blackstone declined to comment for this story.