((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
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Blackstone’s global assets reach $250 billion
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Private equity firm appoints European COO to drive growth
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The rich have left the UK since Brexit – executive
(Added chart) by Iain Withers
Blackstone BX.N’s private banking business plans to expand into at least two new European markets next year to tap growing demand from the wealthy, two company executives told Reuters.
Blackstone, headquartered in New York, has made sourcing funds from high-net-worth individuals a major priority amid a choppy market and as private equity firms seek to diversify their client base by moving away institutional clients.
Blackstone’s European wealth management business currently has offices in London, Paris, Zurich, Milan and Frankfurt. She did not wish to specify which new markets she intended to penetrate.
Blackstone’s wealth products have a minimum investment threshold of $10,000 to $25,000.
The firm has increased its private wealth assets globally to approximately $250 billion currently, up from $103 billion in 2020, or 23% of Blackstone’s total assets of $1.1 trillion dollars. Blackstone declined to specify the value of its assets in Europe.
Navigating the fragmented European market and its myriad regulatory regimes has posed challenges. France and Italy were Blackstone’s fastest-growing wealth markets, while Britain grew more slowly, executives said.
“It’s not the United States of Europe. There’s a lot more complexity, and I think Blackstone understands that,” said Rashmi Madan, head of Europe, Middle East and Africa. (EMEA) within Blackstone’s Private Wealth Solutions group.
But regulatory changes in Europe – including Britain – aimed at encouraging retail investment in private markets are a “positive sign”, Ms Madan said. “There is a growing shift in Europe… that long-term investment is important”
Britain is a key market for wealth management business, despite a growing number of ultra-wealthy people moving elsewhere since the Brexit vote in 2016, Ms Madan said. She was speaking before the announcement of the UK budget last week, which increased some taxes on the wealthy. Blackstone declined to comment on the budget.
To help expand the business, Blackstone promoted Sheila Rapple to chief operating officer for wealth EMEA, who moved to London from New York in October.
“I think there are tremendous opportunities,” Ms. Rapple told Reuters, referring to Europe.
COLLECTION
Blackstone is pinning its expansion hopes on a range of semi-liquid “evergreen” funds designed for retail investors, spanning private equity, credit and real estate. It will launch two new funds in the credit and infrastructure sectors early next year, first in the United States.
Its products are typically sold to high-net-worth individuals through partnerships with local banks or wealth managers, such as French bank BNP Paribas BNPP.PA and Italian insurer Generali GASI.MI .
Buying in private markets exposes retail investors to assets that are illiquid and difficult to value.
Blackstone limited client withdrawals from its flagship $55 billion “BREIT” real estate fund for more than a year, until February this year, as investors sought to divest amid a collapse in property prices. commercial real estate on a global scale.
Blackstone’s retail funds typically have a one or two year “soft lock”, where investors can cash out if they pay a penalty, after which they can exit monthly or quarterly, subject to fund-level caps, Ms Madan said.
This tells investors that the funds are semi-liquid and “effectively investing in private markets.”
