Where Will Blackstone Spend Its Infrastructure Billions?

Blackstone Group LP made a splash in May when it announced a $100 billion ambition for infrastructure investments. On Thursday, it got more specific with its plans.

The private equity giant is just starting to collect money to supplement a $20 billion commitment from Saudi Arabia’s Public Investment Fund, and the firm doesn’t expected to have deals signed until mid-2018, President Tony James said on calls with media and analysts reviewing third-quarter earnings.

Here’s where Blackstone will look, according to James:

  • Listed companies: Private equity and real estate aren’t the only teams investing in public companies. “We expect that to be a major part of our activity in infrastructure,” James said of the strategy.
  • Carve-outs: Some infrastructure-type businesses embedded within large companies would have greater value as standalone assets, he said. “There will be major corporations -- integrated oil companies, others -- repositioning those assets into the infrastructure market,” according to James.
  • Expansion capital: Infrastructure companies have appetite for investment to allow them to build out their network, he added. Such expansion capital has been a “fruitful” investment method for Blackstone and could be a key approach for core and core-plus infrastructure deals, James noted.
  • New build: While it can take more time, money and risk to build infrastructure assets from the ground up, James envisions the fund moving more toward those projects over time. “There will be definite opportunities” in the new-build strategy, he said.
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