Su Shimin, The King Of Wall Street, Is Optimistic About The Chinese Market

"I think China will continue to show extremely strong power for a long time to come." A year later, Stephen A. Schwarzman, co-founder, chairman and CEO of Blackstone Group, once again expressed his optimism for the Chinese market.

Su Shimin has the title of "king of Wall Street". As of March 31, 2021, Blackstone, which he co founded with Peter g. Peterson, has managed $648.8 billion in assets, including $211.8 billion in private equity.

In the past two and a half years alone, Blackstone's AUM has grown by nearly 60%, and the company has launched a series of new strategies, including investment in life sciences and growth.

In March this year, Blackstone Group announced that it had completed the raising of its first growth equity fund, Blackstone growth (BXG), making it the largest fundraising of the world's first growth private equity fund with a fund scale of $4.5 billion.

According to Jonathan gray, President and COO of Blackstone Group, in the first quarter of 2021, Blackstone's business in Asia has further expanded. The second phase of Asia Private Equity Fund (BCP Asia II) has completed the first closure of US $3 billion, and plans to launch the third phase of Asian real estate fund raising within a few weeks.

As the founder of Blackstone Group, Su Shimin has repeatedly publicly said that he wants to "warehouse heavily in China". "In the Chinese market, we focus on companies in the fields of science and technology and health care. The growth rate and fundamentals of these two tracks are huge," he said in the connection of the 15th Annual China Investment Conference and annual summit on May 12

Further expansion in Asia

As an alternative asset manager, Blackstone's main business segments include real estate, private equity, hedge funds and credit. According to the financial report data, as of March 31, 2021, the Aum of Blackstone Group's private equity business was 211.8 billion US dollars, an increase of 7.2% compared with us $19.75 billion at the end of the last quarter, and an increase of 21.2% from $174.7 billion in the same period of last year.

The reporter learned that the private equity business of Blackstone Group includes corporate private equity, tactical opportunities, private secondary markets and infrastructure funds.

Among them, the private equity business of enterprises mainly includes flagship fund Blackstone capital partners, Asia, Blackstone core private equity with long-term holding strategy and Blackstone energy partners focusing on energy.

Among the new funds being raised by the corporate private equity business sector, the target fundraising scale of BCP Asia II has not been officially disclosed. According to the previous overseas media report in November 2020, the fund will raise no less than $5 billion.

Blackstone's last Asian fund was raised in 2018, with a fund size of $2.3 billion. Thus, if the fund is raised as planned, the size of the new fund will be more than twice that of the previous period.

It is also worth noting that Blackstone has recently made a number of new appointments in the private equity business sector, including the appointment of Amit Dixit as the head of Asia's private equity business, and the appointment of ED Huang, head of private equity in Greater China and South Korea, as the chief operating officer of Asia's private equity business.

From the perspective of the whole Asian market, the total amount of private equity fund raising focused on Asia in 2020 will be nearly reduced from $154 billion in 2019 to $81 billion in 2020.

The good news is that although the total amount of equity investment funds raised in Asia will be cut back in 2020, the "gold absorption" effect of head institutions on the fund-raising side will continue.

For the alternative asset management institutions that increase the allocation of PE funds in Asia, on the one hand, the scale of single transaction of private equity business in Asia increases, which increases the demand for capital. On the other hand, having a larger fund size can make the team more competitive in striving for quality projects.

Love China's real estate market

For the Chinese market, Blackstone Group's investment in the real estate sector is quite famous.

Judging from the real estate fund business of Blackstone Group in the global market, according to the financial report information, as of March 31, 2021, the Aum of Blackstone Group in the real estate field was $196.3 billion, an increase of 4.9% compared with $187.2 billion at the end of the last quarter, and an increase of 22% compared with $160.9 billion in the same period of last year.

Su Shimin's speech at the "15th Annual Meeting of China investment · annual summit" shows that his enthusiasm for China's real estate industry has not decreased.

At the "14th annual meeting of China investment · annual summit" at the same period last year, Su Shimin expressed his interest in China's real estate industry and listed two investment opportunities: warehousing and shopping center. "Real estate is an important part of China's economy," he said at the time. To say you are not interested in real estate is like saying you are not interested in breathing. "

Since then, in November 2020, R & F issued an announcement to transfer its 70% equity in the Fuli comprehensive logistics park of Guangzhou International Airport to the Blackstone Group Inc. After the acquisition, Blackstone's logistics portfolio in China will expand by about a third.

Chen Yu, managing director of Blackstone real estate in China, said in an exclusive interview with 21st century economic reporter on the transaction that the layout of Blackstone Group's logistics real estate sector in China is mainly concentrated in the core cities of Dawan District, Yangtze River Delta, Beijing, Tianjin and Hebei. In recent years, the demand in these areas is strong, and the rent growth is relatively fast.

Notably, Chen added in the previous interview that Blackstone's real estate team is still closely monitoring investment opportunities in the long-term apartment sector and has completed an investment in June 2020.

In the above-mentioned forum speech, Su Shimin further elaborated on the investment opportunities in China's real estate sector: "in China's real estate sector, we attach great importance to warehousing and logistics, which is a part of the logistics chain of online shopping and other online activities. In addition, we also favor multi family housing and apartment buildings, which perform well in the real estate industry. What's more, China has been encouraging deleveraging, which offers us a lot of opportunities - because a lot of people may sell their houses. "

It is expected that with the promotion of the second phase of Asian private equity funds and the third phase of Asian real estate funds, Blackstone Group will have more funds to allocate to the Chinese market.