Leading alternative asset manager Blue Owl Capital announced it has entered into a definitive agreement to acquire the business of digital infrastructure fund manager IPI Partners from an affiliate of ICONIQ Capital and an affiliate of Iron Point Partners for a purchase price of about $1 billion.
This purchase price will comprise about 80% Blue Owl equity and approximately 20% cash. The deal is expected to close in Q4 2024 or Q1 2025, subject to certain closing conditions, including third-party consent. It is expected to be neutral to Blue Owl’s earnings in 2025 and modestly accretive in 2026. Blue Owl will partner with an affiliate of ICONIQ to help accelerate the business’s future growth.
IPI has about $10.5 billion in assets under management as of June 30, 2024 and was founded in 2016 as a joint venture between ICONIQ and Iron Point to service the needs of large, high-quality hyperscale and enterprise datacenter users. And the IPI platform has grown into one of the largest private US-based data center investors with a portfolio of 82 data centers comprising over 2.2GWs of leased capacity across the US, EMEA and APAC.
The tenants are primarily investment grade corporations, including several Fortune 100 companies. And the firm is based in Chicago, IL with over 70 team members in global offices and over 50 investment professionals. IPI’s employees are expected to join Blue Owl and will continue to manage IPI’s existing funds.
Upon closing of the deal, IPI’s business will further enhance Blue Owl’s digital infrastructure strategy as part of the firm’s Real Estate platform, which will continue to be led by Blue Owl Co-President Marc Zahr. IPI’s Managing Partner, Matt A’Hearn will become Head of Blue Owl’s digital infrastructure strategy and report to Blue Owl Co-President Marc Zahr.
An affiliate of ICONIQ will be entering into an agreement with Blue Owl to provide services to Blue Owl’s business, including investment analysis and investor relations. And in exchange for these services, an affiliate of ICONIQ is eligible for services payments, that are subject to certain future targets. Blue Owl anticipates these payments will be made between 2026 and 2028.
Deutsche Bank Securities, J.P. Morgan Securities, Morgan Stanley, Societe Generale, and TD Securities are acting as co-financial advisors to Blue Owl in connection with the acquisition. Kirkland & Ellis is acting as legal advisor to Blue Owl.
Gibson, Dunn & Crutcher worked as legal advisor to IPI. And Berkshire Global Advisors worked as financial advisor to Iron Point.
KEY QUOTES:
“The acquisition of IPI with its deep sector expertise complements our existing net lease strategy while providing an ideal opportunity to expand Blue Owl’s digital infrastructure strategy. There is a massive market opportunity to finance data centers, matched by an increasing investor appetite for additional strategies investing behind cloud and AI-driven secular tailwinds. IPI’s tenured investment team, preeminent LP-base and global scale in the digital infrastructure economy will enhance our suite of capital solutions and investment offerings, further strengthening our position as a partner of choice. Investors can benefit greatly from the combination of Blue Owl’s triple net lease knowledge and IPI’s depth in the data centers market.”
-Blue Owl’s Co-CEOs Doug Ostrover and Marc Lipschultz
“It has been a privilege to help build IPI over the past eight years and to secure trust with many of the largest data center customers in the world. During this time, IPI has grown into one of the largest private developers and investors of data centers globally by solving problems for the leading global technology companies. We are excited to deepen our existing partnership with Blue Owl to advance IPI’s market leadership and further execute on this generational opportunity.”
-Divesh Makan, a Founding Partner at ICONIQ
“We are proud to have been partners with ICONIQ in the formation and growth of IPI, and we are confident that the addition of Blue Owl will enable IPI to achieve even greater scale to meet the needs of the world’s largest technology companies.”
-Tom Lynch, a Managing Partner at Iron Point
“On behalf of the IPI team, we are incredibly excited to join Blue Owl and serve as the foundation for expanding the firm’s digital infrastructure strategy, further complementing their market-leading net lease strategy. We are also grateful to our partners at ICONIQ and Iron Point, who were instrumental in helping us become one of the most scaled digital infrastructure managers. We believe there’s a tremendous amount that IPI can accomplish within the Blue Owl ecosystem alongside our partners at ICONIQ, and look to extend our market leading position.”
-Matt A’Hearn, Managing Partner of IPI
