Blackstone and the Public Investment Fund (PIF) of Saudi Arabia have launched a new investment vehicle dedicated to infrastructure with an anchor $20 billion contribution by PIF.
Blackstone anticipates that the program will have $40 billion in total equity commitments in a permanent capital vehicle, including $20 billion to be raised from other investors. The partnership is non-binding and the parties will continue their negotiation to agree on definitive documentation.
Overall, through the equity in this vehicle and additional debt financing, Blackstone expects to invest in more than $100 billion of infrastructure projects, mostly in the United States.
Blackstone has invested in more than $40 billion of infrastructure-related projects globally over the past 15 years. This new vehicle launches a new business for Blackstone with PIF as a strategic partner. This collaboration between PIF and Blackstone is the culmination of a year’s discussions between the two institutions, which began in May 2016.
Blackstone’s new program will help the United States address its need for infrastructure improvement. Independent estimates put the U.S. infrastructure funding gap at up to $2 trillion, making room for significant domestic and international private sector investment. Infrastructure investment plans currently under consideration at the federal level in the United States are expected to create as many as 15 million jobs, while also enhancing U.S. economic growth, productivity and global competitiveness.
“There is broad agreement that the United States urgently needs to invest in its rapidly aging infrastructure. This will create well-paying American jobs and will lay the foundation for stronger long-term economic growth,” says Hamilton E. James, president at Blackstone.