WASHINGTON, Feb. 20 – BlackRock, the asset management firm, is attempting its largest acquisition in 15 years with its purchase of Global Infrastructure Partners (GIP), a private equity firm which manages $100 billion in infrastructure assets around the world. In response, Sen. Bernie Sanders (I-Vt.) today sent a letter to Attorney General Merrick Garland, Federal Trade Commission (FTC) Chair Lina Khan, and Assistant Attorney General Jonathan Kanter in strong opposition of the deal’s approval, citing what appears to be a clear violation of the Clayton Act.
Under Section 7 of the Clayton Act, investors cannot have a stake in companies where “the effect of such an acquisition may be to substantially lessen competition, or to tend to create a monopoly.” If this deal is approved by federal regulators, BlackRock would combine GIP — the third largest infrastructure asset manager in the world — with the more than $50 billion in infrastructure assets it already owns, for a total of $150 billion in infrastructure assets.
“BlackRock has made clear that the acquisition of GIP is part of an ongoing strategy to dominate the infrastructure industry,” wrote Sanders. “Beyond its move to dominate infrastructure investment specifically, this acquisition would allow BlackRock to extend its dominant position as an asset management company more broadly, which is a major concern under Guideline 6 of the FTC and DOJ merger guidelines which states that ‘mergers can violate the law when they entrench or extend a dominant position.’”
Today, BlackRock is the largest asset manager in the world, with over $9 trillion assets under management. BlackRock also controls the Aladdin (Asset, Liability and Debt and Derivative Investment Network) system, which handled portfolio and risk management for nearly $22 trillion in assets in 2020. Fannie Mae, MetLife, and PNC all use Aladdin, giving BlackRock reach over investments outside of its own portfolios.
Sanders continued, “This deal is yet another example of how BlackRock is looking to further concentrate its economic power, which is dangerous for our economy and consumers. Infrastructure is a fundamental part of everyday life. We rely on our roads, bridges, drinking water systems, wastewater plants, railways, schools, and housing to live. Asset managers are increasingly taking control over the infrastructure industry, making it more and more concentrated. The inevitable result of this concentration is unavoidable, higher costs for consumers.”
In 2022, as Chairman of the Senate Budget Committee, Sanders held a hearing on Wall Street greed and growing oligarchy in America, inviting BlackRock CEO Larry Fink to testify. Mr. Fink declined.
To read the letter, click here.
