Blackstone's Private Credit Push: Tapping KKR, Ares Talent

In the wake of recent banking crises, Blackstone is seizing a "golden moment" to expand its private credit strategy, hiring dealmakers from KKR and Ares to bolster its capabilities. This strategic move aligns with the firm's optimistic outlook on private markets and positions it to capitalize on the growing demand for private credit solutions.

Blackstone's recent hiring of David Wasserman from KKR and Michael Arougheti from Ares signals a concerted effort to strengthen its private credit platform. Wasserman, who led KKR's global credit business, and Arougheti, who co-headed Ares' private credit group, bring extensive experience in originating, structuring, and managing private credit investments. Their expertise will enable Blackstone to deploy capital more effectively and generate returns for investors.

The addition of these dealmakers comes at a time when Blackstone's total credit and insurance AUM has increased 9% to $291.3 billion year-over-year. The firm's private credit strategy has generated a gross return of 3.4% in Q1 2023, with net realizations growing 21% over the last 12 months. This growth is a testament to Blackstone's confidence in the private credit market's potential and its ability to capitalize on the rising demand for private credit solutions from clients.



The recent banking crises, including the collapse of Silicon Valley Bank and others, have created an opportunity for Blackstone to intervene with credit products. As banks pull back on lending, Blackstone can step in to provide financing to corporates, driving growth in its private credit AUM. The firm's private credit strategy is well-positioned to benefit from this market dynamic, as evidenced by the 21% increase in private credit net realizations and the 67% rise in segment distributable earnings over the last 12 months.

Blackstone's private credit strategy aligns with its long-term investment philosophy, focusing on stability, predictability, and consistent growth. The firm's commitment to expanding its private credit platform is further underscored by its hiring of dealmakers from KKR and Ares. By embracing private credit, Blackstone is positioning itself to capitalize on the rising demand for private credit solutions from clients, as seen in the wake of recent bank collapses.

In conclusion, Blackstone's strategic push into private credit, bolstered by the hiring of dealmakers from KKR and Ares, is well-timed and well-supported by market trends. As the firm continues to capitalize on the growing demand for private credit solutions, investors can expect Blackstone's private credit strategy to deliver steady performance and consistent growth.