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Schwarzman Says Blackstone Has ’Aggressive’ Plans for Growth

Dec. 17 (Bloomberg) -- Blackstone Group LP Chairman Stephen Schwarzman said his firm has “aggressive plans” for further diversifying its operations and increasing assets under management.

“We’ve expanded our business significantly” since going public in 2007, Schwarzman said today in a Bloomberg Television interview with Erik Schatzker and Stephanie Ruhle. “That was highly unusual during the financial crisis, when almost all financial institutions were pretty much shrinking.”

Schwarzman declined to give details of his expansion plans. Blackstone, Carlyle Group LP and KKR & Co. are among possible bidders for JPMorgan Chase & Co.’s Global Special Opportunities unit, which has about $2 billion in assets, a person familiar with the matter said this week.

Schwarzman, 66, said in June he could imagine New York-based Blackstone reaching $500 billion in assets. The firm, which Schwarzman founded in 1985 with his partner Peter G. Peterson, currently oversees more than $248 billion across private equity, real estate, hedge funds and credit assets.

One area where Blackstone is seeing growth is gathering money from individual investors, Schwarzman said today. The firm has almost 30 people who answer questions from individual investors and help Blackstone create new offerings. Fundraising from individual investors has grown to $7 billion in the past 12 months from $600 million in 2009, Schwarzman said.

‘Overrated’ Liquidity

“We basically offer the same type of product set that we do to institutions, and we’ve had very rapid growth in that area,” said Schwarzman. “Illiquidity is not a bad thing. Liquidity is in effect overrated because the premium in terms of return for illiquidity is so much higher.”

Carlyle this year started a fund with New York-based investment firm Central Park Group LLC that accepts as little as $50,000 from individual investors. Central Park Group will allocate money from the pool to funds run by Washington-based Carlyle, the second-biggest manager of alternatives to stocks and bonds, behind Blackstone.

To contact the reporter on this story: Devin Banerjee in New York at dbanerjee2@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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