The epidemic hits in 2020, has already caused global economic pressure. The Blackstone Group, which is good at risk management, now has $150 billion investable funds. Stephen A. Schwarzman, chairman and CEO of the Blackstone Group, said that right now the first priority of Blackstone will be given to the safety of their employees. They will help their invested companies to overcome difficulties. He is optimistic about high-quality logistics and real estate in China and will continue to look for promising investment opportunities in China.
Until the end of 2019, the Blackstone Group is in charge of managing $571 billion in assets, and its business involved private equity investment, real estate investment, hedge fund solutions, and credit investment.
Continue to look for investment opportunities in China
China Securities Journal: Which investment opportunities is Blackstone currently focusing on?
Stephen A. Schwarzman: Over the past 20 years, we have been active with investing in China. In future, we will continue to look for new investment opportunities in China. Currently, Blackstone Group has 150 billion USD of investable funds. These funds can be invested in high-quality companies and real estate projects. Potential investment targets include Asian assets. However, at the moment, our first priority would be given to ensuring the safety of our employees and to helping our invested companies overcome the current difficulties.
In recent years, Blackstone was focusing on investments in Chinese commercial real estate. For example, in 2019, Blackstone bought the Changtai Plaza in Shanghai for 1.5 billion US USD (about 10 billion RMB). According to media statistics, Blackstone’s investment in China’s real estate sector reached 20 billion RMB in 2019.
China Securities Journal: How do you view investment opportunities in China’s commercial real estate?
Stephen A. Schwarzman: In the real estate field, we are very confident in those investment fields that follow the development trend. For example, the development of China’s online e-commerce economics will bring a large demand for warehousing and logistics. We believe that there are good investment opportunities in these two areas.
In China, we have warehousing properties in the core material distribution center, and we lease these properties to the third-party logistics providers and Chinese technology companies. We are also concerned about A-class office buildings in China and even Asia.
Don’t raise money that exceeds investment capacity
China Securities Journal: After the establishment of Blackstone in 1985, you decided to raise the first fund after starting business, with the target of $1 billion. Before this, the scale of PE funds raised for the first time has never reached 1 billion USD. Did you regret that maybe you were too ambitious?
Stephen A. Schwarzman: I have always believed that if you want to invest in something, it must worth your enthusiasm. We want to invest in the kind of things that will have a significant positive impact once they are reached. I believe that everything must be given with 100% effort, which means that we can only do one thing at a time, which requires us to choose the correct goal.
Although we were a startup company at the time, the belief I mentioned drove me to raise the largest PE fund at that time. My partner and I were not experienced. However, we knew that raising 5 million or 10 million USD for a fund of 50 million USD is as hard as raising 50 million or 100 million USD for a larger fund.
Of course, the size of the fund should fit the investment opportunities. Don’t raise money that exceeds investment capacity.
Autor: S.Y. SU