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The Blackstone Group is preparing private capital groups to significantly increase investment across Europe as economic reforms revive growth over the years.
Stephen Schwarzman, co-founder of the 1.2tn-in-assets Investment Group, told the Financial Times in an interview that Blackstone plans to invest “at least $500 billion” in Europe over the next decade.
“We are currently seeing signs of change in Europe,” Schwartzman said. “European leaders are generally more sensitive to the fact that growth rates over the past decade have been so low that it is not sustainable for them. So they are considering putting pressure on the European Union on deregulation.
Schwartzmann highlighted Germany’s decision under new Prime Minister Friedrich Merz, highlighting the use of deficit spending to fund infrastructure and defence investments as positive changes.
“We expect to put at least $500 million in new assets in Europe over the next decade. Hopefully things could go well,” Schwartzman said. “The fact that all seniors in different European countries recognize the need for change is positive.”
Schwartzman’s investment goal, first reported by Bloomberg, shows a significant acceleration for Blackstone. Blackstone now holds around $350 million in European assets after investing in the region for about 25 years. “It’s obviously accelerated to do $500 million (investment) over a decade,” he said.
Blackstone’s rivals in the private capital industry are also growing optimistic about European investment outlook. Apollo President Jim Zelter said earlier this month that he plans to invest $100 million in Germany over the next decade. Finding a niche in software, private equity group Thoma Bravo recently opened its European headquarters and began attacking major acquisitions to capitalize on the valuation gap with its US competitors.
Schwartzman spoke to FT as he and many senior Blackstone leaders celebrated their 25th anniversary in Europe.
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In recent years, Blackstone has hit some of the region’s biggest acquisitions, including the privatization of Italian infrastructure group Atlantia in late 2022 by €54 billion and the following year by Norwegian online classification group Adevinta, which has been acquired of Norwegian online classification group, EUR 14 billion.
Schwartzman said Blackstone’s growing European excitement lies in the gaps in valuation between European companies and their US listed peers and lower lending costs. But it mainly depends on growing beliefs surrounding economic reform.
“There is clearly a difference in valuation between the US and Europe, where we see as private equity and the real estate sector, infrastructure. But all of these factors are needed,” he said. “A cheaper price isn’t necessarily the right answer.”
