SCHEDULE 13D: BlackRock Portfolio Management Discloses 23.3% Stake in Hess Midstream LP Following GIP Acquisition

BlackRock Portfolio Management LLC, a subsidiary of BlackRock, Inc., has filed a Schedule 13D disclosing a 23.3% beneficial ownership stake in Hess Midstream LP, primarily stemming from BlackRock's acquisition of Global Infrastructure Management, LLC.

Summary

• BlackRock Portfolio Management LLC (BPM), an indirect wholly-owned subsidiary of BlackRock, Inc., has filed an initial Schedule 13D regarding its beneficial ownership in Hess Midstream LP.
• BPM reports an aggregate beneficial ownership of 31,365,023 Class A Shares of Hess Midstream LP, representing 23.3% of the class.
• This ownership primarily results from BlackRock's acquisition of Global Infrastructure Management, LLC (GIP Parent) for a total consideration of $3 billion in cash and approximately 12 million shares of BlackRock common stock, a transaction that closed on October 1, 2024.
• As part of an internal reorganization on January 28, 2025, BPM was delegated authority to file this Schedule 13D for the 31,234,403 Class A Shares beneficially owned by the GIP Entities.
• Additionally, BPM reports 130,620 Class A Shares (Reporting Advisory Shares) held by BlackRock's Advisory Subsidiaries for client accounts, which were acquired for an aggregate purchase price of approximately $4,444,323 for investment purposes in the ordinary course of business.
• The beneficial ownership calculation is based on 104,086,900 Class A Shares issued and outstanding as of January 13, 2025, plus 30,336,403 Class B units beneficially owned by the GIP Entities as of January 28, 2025, which are convertible into Class A Shares on a one-to-one basis.
• BPM and the Reporting Business Units disclaim beneficial ownership of shares subject to cash-settled derivative agreements, specifically 31,968 Class A Shares in long positions (representing economic exposure to less than 0.1%) and 138,254 Class A Shares in short positions (representing economic exposure to approximately 0.1%).
• Transactions in Class A Shares by BlackRock entities during the 60 days ended January 28, 2025, included both buys and sells, with net sales of approximately 40,851 shares by Advisory Subsidiaries.

Sentiment

Score: 7

Explanation: The document is a factual regulatory filing detailing a change in beneficial ownership due to a major acquisition and internal reorganization. It provides transparency regarding BlackRock's significant stake in Hess Midstream LP. There are no explicit negative disclosures about the issuer, and the strategic acquisition by BlackRock is generally viewed positively for the acquiring entity.

Positives

• BlackRock, a major global asset manager, has consolidated a significant beneficial ownership stake in Hess Midstream LP, indicating a strategic investment or a substantial holding through its acquired entities.
• The acquisition of Global Infrastructure Management, LLC (GIP Parent) by BlackRock strengthens BlackRock's position in infrastructure investments.
• The filing provides transparency to the market by clarifying the beneficial ownership structure following BlackRock's acquisition of GIP.

Future Outlook

BlackRock's Advisory Subsidiaries may continue to evaluate their client accounts' investment in Hess Midstream LP and may acquire or dispose of Class A Shares from time to time. Any such acquisitions or dispositions will depend upon factors including the price and availability of the Issuer's securities, developments concerning the Issuer's business and industry, the Advisory Subsidiaries' general investment policies, other investment opportunities, market and economic conditions, and tax considerations.

Management Comments

• "Neither the present filing nor anything contained herein shall be construed as an admission that BPM constitutes a 'person' for any purposes other than Section 13(d) of the Exchange Act."
• "The Reporting Advisory Subsidiaries did not acquire beneficial ownership of the Reporting Advisory Shares with the purpose or effect of changing or influencing the control of the Issuer or as a participant in any transaction having such purpose or effect, or in connection with any plan or proposal that would be subject to disclosure under Item 4 of Schedule 13D with respect to the Issuer."

Industry Context

This filing reflects the ongoing consolidation and strategic investments within the financial services and asset management industry, particularly BlackRock's expansion into infrastructure investments through the acquisition of Global Infrastructure Management. It also highlights the complex ownership structures and reporting requirements for large institutional investors holding significant stakes in publicly traded companies, especially in the midstream energy sector.

Corporate Governance

Legal Proceedings

• Neither BlackRock Portfolio Management LLC nor, to the best of its knowledge, any of the Covered Persons (BlackRock executive officers and directors) has been convicted in any criminal proceedings (excluding traffic violations or similar misdemeanors) during the last five years.
• Neither BlackRock Portfolio Management LLC nor, to the best of its knowledge, any of the Covered Persons has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction that resulted in a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws, during the last five years.

Stakeholder Impact

• Shareholders of Hess Midstream LP: The filing provides increased transparency regarding a significant institutional holder (BlackRock/GIP), which could imply a degree of stability or influence from a major investor.
• Shareholders of BlackRock: The filing reflects the integration of GIP's assets into BlackRock's portfolio, which is part of BlackRock's strategic growth and expansion into infrastructure investments.

Next Steps

• BlackRock's Advisory Subsidiaries may continue to acquire or dispose of Class A Shares on behalf of client accounts.
• BPM will continue to file amendments to this Schedule 13D as required by SEC regulations.

Key Dates

Recommendation

Keywords

BlackRock, Hess Midstream LP, Schedule 13D, Beneficial Ownership, Global Infrastructure Management, GIP Acquisition, Class A Shares, Investment Management, SEC Filing, Financial Reporting, Asset Management, Midstream Energy