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A unit within Blackstone's Infrastructure and Asset Based Credit arm has snapped up interests in a $1B digital infrastructure loan portfolio owned by Santander.
The portfolio is made up of loans that finance data centers, transportation and renewable assets across the U.S. and Western Europe. The companies did not release how big Blackstone’s stake is.
Blackstone's Credit & Insurance unit manages $80B in assets and invests in digital and energy transition infrastructure. The deal is in line with the unit's plan to increase European investment activity, Jacob Nowack, the unit's managing director, said in a statement.
The deal also supports Blackstone's push to provide capital to financial institutions on a long-term and large-scale basis, said Robert Horn, Blackstone's global head of infrastructure and asset based credit.
Blackstone is on the hunt to buy data centers and companies that own them.
“The scale of the data center opportunity is immense,” Global co-Head of Blackstone Real Estate Nadeem Meghji told Bisnow in March. “It's the single most exciting strategy we have globally today.”
The firm is planning a $13B data center campus spanning 5.8M SF in Northern England. The turnkey project — which is alone worth more than most European property companies in their entirety — will be operated by Blackstone’s data center affiliate, QTS.
Blackstone has had a heavy year for investments. It put $22B toward real estate acquisitions during the first nine months of the year, doubling its 2023 activity over the same period.
The firm may shift to selling in 2025, CEO Jonathan Gray said on an earnings call.
Santander is on a targeted push of its own to improve capital and increase lending capacity. The deal is part of its plan to streamline its balance sheet, Marcel Patiño, Santander global head of private debt mobilization, said in a press release.
Since it's a bank, Santander was subject to infrastructure credit regulations tied to the loans. These regulations make holding onto the assets more expensive. Blackstone, being a private capital firm, doesn't have to follow these regulations.
Santander is also looking to sell off assets and significant risk transfers tied to $21B of loans out of the U.S., the U.K., Germany and Mexico.
In December, Santander paid $1.1B for a 20% equity stake in a $9B loan portfolio from the FDIC. The portfolio was the last piece of the failed Signature Bank’s $33B in CRE loans.
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