A new star emerges inside Blackstone
Blackstone, the world’s largest alternative manager, is flexing its muscles again after enduring a test when interest rates soared in 2022, causing many investors to sell their investments in its massive property fund, Breit.
It’s on the offensive again after raising $171bn and investing $134bn in 2024, not far off the New York-based group’s activity in 2021 when chief executive Stephen Schwarzman professed an “out of body experience” as cash sloshed around freely.
In its fourth-quarter results, Blackstone’s relatively nascent infrastructure business emerged as a driver of better than expected returns.
Its $43bn perpetual infrastructure fund soared about 20 per cent for the year, lifting its fee-related performance revenues by $1.2bn, or 728 per cent, from the same time in 2023.
At the helm of Blackstone’s infrastructure unit is a rising star inside the group who was name-checked by Schwarzman in front of shareholders on Thursday.
In 2017, Sean Klimczak was tasked with getting Blackstone on the map in infrastructure, an area where non-US groups such as Brookfield, Macquarie and EQT dominate. The efforts didn’t start off swimmingly — a Saudi Arabia-backed effort initially stalled.
Meanwhile, independent infrastructure investment outfits including Global Infrastructure Partners and Stonepeak, which had been spun out of Blackstone, had their assets soar.
But Blackstone’s now collected $55bn in infrastructure assets and believes it has positioned itself to be a major player. It has been bolstered by winning investments such as gas export pioneer Cheniere Energy Partners and data centre operator QTS.
Schwarzman said the toils of building businesses internally carry “significant economic benefits as compared to a strategy of bolt-on acquisitions”, an apparent reference to a wave of infrastructure-related deals such as BlackRock’s $12.5bn takeover of GIP last year.