BlackRock, the world's largest ETF manager, known for its passive tracking of publicly listed securities, has unexpectedly ventured into the private equity sector by acquiring Global Infrastructure Partners for $12.5 billion.

Larry Fink, the founder of BlackRock, is familiar with private equity, having worked at Blackstone before establishing his own company.

Blackstone, his former employer, is also actively participating in the market. It has been focusing on acquiring and developing data centers, anticipating that the rise of AI will increase the demand for computing power and, consequently, the need for physical infrastructure to house servers.

In 2021, Blackstone acquired QTS, one of the largest data center landlords in the US, and has since invested an additional $1 billion in development since the acquisition began.

Last month, Blackstone announced a joint venture with Digital Realty to construct a $7 billion hyperscale data center.

As of yesterday, Blackstone is considering the acquisition of another data center company, Winthrop.

KKR, another private equity giant, recently launched a $6.8 billion APAC infrastructure fund, a testament to the success of its Asia infrastructure platform, which has managed $13 billion in assets since 2019.

In the U.S., there has been a recognized need for infrastructure improvement, leading to an earmarked investment of $1.2 trillion to enhance the nation's infrastructure. This renewed focus likely sparked investor interest, with major players seeing opportunities in sectors such as energy, utilities, water, roads, and data centers.

These sectors typically cater to fundamental human needs, ensuring consistent demand. They often operate within unique, monopolistic markets, providing investors with stable cash flows too.

For those interested in gaining exposure to infrastructure, it's not necessary to turn to private equity, as numerous options exist within publicly

 Despite this, the ETF has performed admirably, delivering an annual return of 13.24% since 2018, even surpassing the S&P 500 ETF returns over the same timeframe. This demonstrates that the growth in the infrastructure industry is not merely a recent phenomenon or a one-off occurrence; it has been sustained over several years[Happy] [Happy] [Happy] [Happy]