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Blackstone's Gray Sees Italy Crisis Creating Chance to Buy

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  • But it’s likely to lead to slower growth in Europe, he says
  • Blackstone president doesn’t see European Union break up

How Blackstone's Jon Gray Built a Career by Being Bold

Blackstone Group LP President Jon Gray said the crisis in Italy may spur investment opportunities, but it could lead to slower growth and more volatility in Europe.

“Italy trades off, a bunch of things trade off, and that could create a bunch of opportunity,” Gray said Wednesday at Deutsche Bank’s Global Financial Services Conference in New York.

Asked if he would buy Italian assets now, Gray said: “Sure. It’s a function of price. If you look back after Brexit, in our real estate business we bought a couple of 100 million pounds of warehouses. It was literally 10 days after Brexit. We tend to focus more on long-term value than short-term market movements.”

Gray said the broader issue is the challenge facing the European Union.

“Stepping back and looking at Europe you’d say the set up of a monetary union without a fiscal union is hard,” he said. “And it’s going to lead to volatility along the way. I think that will continue. It creates more of a risk premium for investing in Europe. It slows the rate of growth.”

Italy exiting the EU is unlikely, he said.

“The Europeans do have a pretty big incentive to stay together,” he said. “And even in Italy, if you polled the population, they do want to stay in the Euro. I think Europe will find a way to hold it together albeit with slower growth and more volatility.”

Blackstone is the world’s largest alternative investment manager with about $450 billion of assets.

(Adds Gray comments on Italy in third paragraph.)
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