Blackstone Inc.’s Steve Schwarzman said his firm is eyeing a bevy of buying opportunities in real estate across Europe as central banks become less aggressive with rate hikes, allowing deal volumes to begin to bounce back.
The private equity giant has liked deals it’s seen involving data centers, warehouses and student housing across Europe, Schwarzman said in a Bloomberg Television interview on the sidelines of the UK’s Global Investment Summit in London.
“The deal business is not totally in mothballs and these things start again,” Schwarzman, who’s Blackstone’s chairman and chief executive officer, said in the interview. “I think we’re more on that side of the cycle, although it has been somewhat dreary for a year.”
Blackstone teamed up with investors including Permira earlier this month to buy Adevinta ASA in a deal valuing the European online classifieds company at about €14 billion ($15 billion) including debt in one of the year’s biggest buyouts.
As the turmoil of the Covid era gave way to surging inflation, central banks around the world ratcheted up interest rates. That crimped deal volumes, which is bad news for private equity investors, who are known as limited partners.
The “biggest concern” LPs have is that they aren’t getting capital flows back as assets aren’t being sold, he said, adding that “these types of cycles always end and things return to normal.”
The investment summit features high-profile executives and bankers including JPMorgan Chase & Co.’s Jamie Dimon. The government earlier said it is unveiling £29.5 billion ($37.2 billion) of new investment for the summit, though at least £10 billion of the investment had already been announced.
The conference comes at a time that the UK is looking to jump start investment into a lackluster UK economy. Many businesses complain about a lack of support and the message sent by the government’s cancellation of part of a long-planned high-speed rail link.
Earlier, Schwarzman participated on a panel with British Prime Minister Rishi Sunak, where he touted the importance of businesses quickly adopting artificial intelligence technology. He also said this month’s meeting between China and the US should help warm relations between the two countries.
In the wide-ranging conversation, he also noted that slowing inflation would encourage investment while noting he wouldn’t necessarily recommend the UK adopts the largesse of President Joe Biden’s Inflation Reduction Act because it could be inflationary.
Schwarzman said the UK remained an alluring place for investment thanks to its legal system, universities and life science expertise. He said Blackstone’s new London headquarters reflected his confidence in the UK.
“I have a simple rule – I only invest in places that I’m willing to visit twice,” Schwarzman said.