Investment management giant Apollo has announced its expansion into infrastructure with the acquisition of Argo Infrastructure Partners – a mid-market asset manager targeting essential infrastructure assets in North America.
In a statement this week, Apollo said Argo’s focus on core and core plus infrastructure assets will broaden its existing infrastructure platform, as the giant sets its sights on scaling its infrastructure capabilities through strategic investments.
Once the transaction closes, likely in the second quarter of 2025, Apollo’s infrastructure platform will gain an additional US$6 billion of assets.
Late last year, BlackRock announced its acquisition of Global Infrastructure Partners (GIP), creating an industry leader in infrastructure across equity, debt and solutions.
At the time, BlackRock chairman and CEO Laurence D Fink said “infrastructure represents a generational investment opportunity”.
“Through the combination of BlackRock and GIP, we are well positioned to capitalise on the long-term structural trends that will continue to drive the growth of infrastructure and deliver superior investment opportunities for clients globally,” Fink said.
Commenting on Apollo’s decision to pinpoint infrastructure as a strategic priority, Neal Epstein, vice president of private credit at Moody’s Ratings, said this deal underscores the growing significance of private credit and equity in the infrastructure sector.
“This move not only enhances Apollo’s asset management capabilities but also reflects the broader trend of institutional investors seeking stable, long-term returns through private credit investments in essential infrastructure,” Epstein said.
“Argo’s expertise will be additive to Apollo’s existing capabilities, well-positioning the company to capitalise on new opportunities and drive value creation in this burgeoning market. The acquisition echoes BlackRock’s recent acquisition of Global Infrastructure Partners.”
Just this week, in its inaugural private markets report, IFM Investors said governments around the world are increasingly seeking private sector funding for their infrastructure projects.
“Our research reflects this trend, with over half of investors (52 per cent) agreeing that the private sector is crucial to infrastructure financing,” IFM said in its Private Markets Macro Outlook.
The super fund-run manager said the proportion of investors in its research who allocate funds to infrastructure is projected to grow globally over the next three to five years, by 8 percentage points for infrastructure equity and by 5 percentage points for infrastructure debt.
Interestingly, IFM singled out North American infrastructure as being the target of increased capital inflows as a result of its provision of stable returns, inflation protection and defensive assets that can be held for the very long term.
