Blackstone to Invest $500 Billion in Europe Over Next Decade

Blackstone CEO and co-founder Steve Schwarzman is set to celebrate the company’s 25th anniversary of European operations in London. Schwarzman, who is on the verge of surpassing Warren Buffett as the longest-running, still-serving Fortune 500 CEO, has a unique perspective on his legacy. He focuses on opportunities and building rather than dwelling on his legacy. Schwarzman recently announced that Blackstone intends to invest at least $500 billion in assets across Europe over the next decade, significantly increasing its current $300 billion worth of assets.

Schwarzman believes that Europe's lack of innovation presents a unique opportunity for Blackstone. The region's large economy and friction points make it an attractive investment destination. Blackstone has capitalized on Europe's struggling economies by acquiring undervalued real estate assets and developing them for substantial profits. The company's first major investment in the U.K. was the $850 million acquisition of the historic Savoy hotel. Blackstone has since made strategic investments in various sectors, including leisure facilities and logistics centers, to capitalize on Europe's lagging infrastructure push.

Blackstone's investments in Europe have been guided by three cardinal rules: "right neighborhood, right price, right intervention." The company has identified high-growth sectors such as logistics centers, electricity providers, and data centers, which are crucial for the growth of AI and online shopping. Blackstone's co-chief investment officer and European head of private equity, Lionel Assant, highlights the importance of these rules in Europe, where growth has been slower than in the U.S.

Despite Europe's relatively weak public markets, Blackstone has found a goldmine in the region's private companies. More than 90% of Europe's $100 million-plus revenue companies are private, compared to 87% in the U.S. Blackstone has taken several European firms private, removing them from the scrutiny of quarterly reports and pressure for immediate returns on investment. This approach allows Blackstone to focus on long-term growth and make the right investment decisions.

Blackstone's investments in Europe have faced skepticism, but the company has consistently grown its assets despite global financial crises and Brexit. The company's focus on buying assets with potential for value improvement has been a key factor in its success. Blackstone has also faced regulatory challenges, particularly in the housing sector, where it has been accused of contributing to gentrification. The company has refuted these claims and has focused on increasing the supply of affordable housing in Europe.

As Blackstone approaches its 40th anniversary, CEO Schwarzman reflects on the company's culture and recruitment strategy. Blackstone now has around 800 employees across Europe and the Middle East, with more than 650 based in London. Schwarzman emphasizes the importance of hiring smart, hardworking individuals with a will to win and a meritocratic mindset. Schwarzman is confident that Blackstone will continue to take advantage of Europe's historic pessimism to unlock value and drive growth in the region.