BlackRock's Barry Tackles Infrastructure in Key Fink Project

(Bloomberg) -- As battalions of infrastructure investors prepare to deploy billions of private-sector dollars, Jim Barry commands a small but growing platoon.

While his employer boasts $5.4 trillion in assets under management, Barry's business at BlackRock Inc. is an up-and-comer among deep-pocketed behemoths. This week, the 50-year-old Irishman announced the purchase of two energy infrastructure funds that catapulted the amount he manages in the sector to $15 billion and he aims to grow it to $30 billion in the next five years. By contrast, rival Blackstone Group LP aims to raise $100 billion.

Investment in roads, bridges, tunnels and airports promises to be one of the year's biggest bets, and a growing amount of money awaits the signal from President Donald Trump to go to work. Trump's plan, which will be promoted Wednesday in a speech in Ohio, will augment the government's $200 billion with $800 billion of investment by states, localities and the private sector. BlackRock Chief Executive Officer Laurence D. Fink, who's a member of Trump's corporate leaders advisory panel, has said he wants to double Barry's business.

“Larry himself felt we needed to be serious about infrastructure,” Barry said in an interview at BlackRock's headquarters in New York.

But he acknowledges that committing money for U.S. projects won't be easy.

“Frankly, it's going to take time. I wouldn't be holding my breath,” Barry said. “If the United States gets its act together the capital will be there.”

For more on Trump's building plans, see Bloomberg QuickTake

Barry occupies an unusual spot inside the world's largest asset manager. His unit is the fastest growing part of the company's active business, which is facing challenges as clients move assets to passive strategies.

A native of Cork, Barry joined BlackRock in 2011 when it made the first move into real assets. That year the company forged a partnership with NTR Plc, the Irish infrastructure company where Barry was chief executive. During his tenure there, he expanded into power, water and telecommunications in the U.S. and Europe, gaining hands-on experience in the field.

Yet even with a seasoned executive at the top and a team of more than 350, BlackRock's infrastructure operation is an underdog in an industry long dominated by firms including Global Infrastructure Partners, Macquarie Group Ltd. and Brookfield Infrastructure Partners. It's also facing fresh competition from newcomers like Blackstone, which are trying to take advantage of increased investor appetite. Blackstone recently received a $20 billion tentative commitment from Saudi Arabia's Public Investment Fund.

Expansion Plans

Barry, who comes across as gregarious, is quick to dispel any notion about BlackRock's standing in the industry. “We're BlackRock so we're never an underdog,” Barry said Tuesday on Bloomberg TV. “Five years ago we had zero capital so our rate of growth is phenomenal.”

Video: Barry on why infrastructure deals are tough

A Harvard MBA who got his first taste of running a business by starting a campus magazine at the University College Cork, Barry was promoted in 2016 to run BlackRock's newly created real-assets group. He hopes to attract clients by adding higher-yielding products and wants to expand renewable-power and infrastructure-debt investments in Asia and Latin America.

He also wants to reinvigorate the firm's real estate investing arm, where assets are down a third from their 2007 peak, by rolling out more products and expanding geographically.

Moving Carefully

Dry powder doesn't assure success in infrastructure, according to Barry, who said he always wanted to be in management because of his parents. His mother worked as an orthodontist in Ireland when few women got degrees in the field and his father built a business that's now part of accounting firm Ernst & Young.

"Recent announcements of tens and hundreds of billions dollars being raised for investment -- I just don't see that kind of opportunity in the short term,” said Barry, who got his start in finance working in mergers at Morgan Stanley and at consulting firm Bain & Co.

While optimistic about BlackRock's fortunes in infrastructure, he's also approaching opportunities carefully. “In my experience it takes three to five years to mobilize any substantial program of privatization or public-private partnerships, if you have cohesive policy and effective administration,” Barry said.

Should he see movement in Washington that signals substantial investment opportunities, Barry said he's prepared to make an acquisition or add staff.

There are other challenges. The firm recently faced opposition in Canada, where some politicians criticized its role in forming an infrastructure bank that they contend benefits wealthy investors ahead of taxpayers, the Canadian Press reported in May. Barry says it's the role of policy makers to ensure that private sector investments benefit communities.

Barry also makes a point of understanding the impact of his investments. He logs the majority of his time on the road looking at properties -- that is, when he's not visiting his team scattered across 25 BlackRock offices or flying back to Dublin each weekend to see his wife, two daughters and two sons.

“I probably travel as much as a 747 pilot,” he said.

While he and competitors await details on Trump's plan, Barry and his group are pushing into another region: Asia. There's opportunity for renewable investments in Japan following the 2011 Fukushima disaster and in Australia, which has been historically reliant on coal, he said.

Patience is the key. “We're being very thoughtful on where we go play,” he said.

--With assistance from Miles Weiss David Gura and Bob Ivry

To contact the reporter on this story: Sabrina Willmer in Boston at swillmer2@bloomberg.net.

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Josh Friedman, Alan Mirabella