Middle East sovereign funds have revolutionised capital and providing capital for all kinds of different projects, investments, funds and co-investments, noted Stephen A Schwarzman, chairman, CEO, and co-founder of Blackstone.
He was speaking at a panel session on ‘A new global growth story’ at the Qatar Economic Forum, powered by Bloomberg and joined by Francine Lacqua, anchor, Bloomberg Television.
On Middle Eastern sovereign funds reshaping private equity: “I started coming to the Middle East in 1991 and a lot of the countries have just started funds, and now the Middle East sovereign funds have revolutionised capital and providing capital for all kinds of different projects, investments, funds and co-investments.
“It is one of the most vital parts of the world because the amount of money that needs to go into the individual countries is less than the amount of income that keeps increasing the scale of the funds. There is an enormous professionalisation of the investment process over the last 30 years.”
Schwarzman said: “Capital is still flowing, trade has been affected, and there is the start of capital flows being affected. I think that is a negative for the global economy, and I think everyone is concerned about that and even geopolitically, muscular politics can only go so far before it starts creating very adversarial types of relationships, which are not good for any country.”
On the world economy, inflation, fragmentation, and its relationship with deal-making Schwarzman said: “We are already seeing activity in Europe in real estate for example, because people become sellers, given the dramatic increase in interest rates and financial institutions wanting to provide less leverage. The owners of assets have become structural sellers to reduce their leverage, so we are already seeing terrific opportunities there, and it’s just a matter of time before that happens in other places in the world.”