Years of planning usher in a harvest period: BlackRock leverages $12 billion financing for Meta, accelerating its entry into the private equity market as a heavyweight player

According to Zhitong Finance APP, BlackRock (BLK.US) is seeking to sell over $12 billion in bonds to help finance Meta's (META.US) data center in El Paso, Texas. This debt issuance is a result of CEO Larry Fink's efforts over the years to transform this public market investment giant into a heavyweight player in the private market.

The upcoming bond sale brings together investors from Fink's recent two major acquisitions—Global Infrastructure Partners (GIP) acquired for $12.5 billion and HPS Investment Partners acquired for $12 billion—and pushes BlackRock further into an increasingly competitive landscape, assisting in financing the artificial intelligence (AI) boom. So far, competitors Blue Owl Capital Inc. and Blackstone have dominated the largest data center financing projects.

According to insiders, the transaction is also an example of how BlackRock executives plan to leverage these two sectors for potential future deals. GIP has traditionally focused on investments in infrastructure projects, while HPS has built its business through transactions including complex credit financing.

Under the agreement with Meta, funds managed by GIP and HPS own 80% of the joint venture "Sopaipilla Holdings Project" (the official name of the joint venture established with Meta). The entity holding that equity is currently raising financing in the debt market. The remaining 20% equity of the joint venture is held by Meta, which is constructing the data center campus.

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Just days before the bond sale marketing activity was launched, Fink stated that GIP and HPS are moving "from asset origination to integration." Last week, after BlackRock released its quarterly earnings report, he told analysts that the deal pipeline for these two sectors is "continuously building in a way that enhances our confidence in the merged platform, especially in the digital infrastructure space."

Insiders indicate that, in addition to the debt being raised, GIP and HPS also hold equity in the project. This gigawatt (GW) level data center is expected to be operational by 2028 and will support over 300 onsite jobs upon completion.

Additionally, insiders revealed that GIP's Managing Director Wes Altman and HPS's Managing Director Garrett Cockrum are both expected to speak to potential buyers of the $12 billion bonds supporting the project. JP Morgan and Morgan Stanley launched the marketing efforts for this issuance on Monday.

According to insiders, for Meta, bringing in BlackRock as a partner is viewed internally as a significant victory.

The deal structure between BlackRock and Meta is similar to the previous collaboration between this hyperscale cloud service provider and Blue Owl on its Hyperion project in rural Louisiana. Blue Owl Holding 80% of the shares in the joint venture, Meta holds the remaining 20%, allowing the tech company to retain control over daily operations while keeping debt off the balance sheet. This month, Meta expanded the Hyperion project beyond the scope covered by the joint venture.

Before BlackRock undertook this transaction, the company was taking steps to increase its investment in artificial intelligence technology and data centers, including the agreement reached in October to acquire Aligned Data Centers for $40 billion. The deal is expected to close soon, with participants including GIP, BlackRock's partners (including Microsoft and NVIDIA), as well as the technology investment platform MGX, co-founded by the Abu Dhabi sovereign wealth fund Mubadala Investment Company and the UAE artificial intelligence company G42