WEBVTT - Jon Gray Talks Tariffs, Economy, and AI

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Blackstone President and COEO John Gray says that despite market volatility,

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<v Speaker 2>there is a pent up desire to engage in transactions

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<v Speaker 2>and IPOs across the market. Gray spoke with Bloomberg Shanali

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<v Speaker 2>Basseg at Bloomberg invest in New York on Tuesday.

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<v Speaker 1>Being here, John, thank you for being here. Tariffs. I mean,

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<v Speaker 1>I don't know how you start anywhere else on a

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<v Speaker 1>day like today, because the big question is, when you

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<v Speaker 1>own so many businesses, when you have so many types

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<v Speaker 1>of debt and equity tied to companies around the world,

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<v Speaker 1>how do you think about the way this is evolving.

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<v Speaker 3>So I'd start with us. The good news is we.

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<v Speaker 4>Don't own a lot of businesses that export physical goods

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<v Speaker 4>in the United States at scale, so that's helpful for us.

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<v Speaker 4>But of course, as you point out, we're big investors

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<v Speaker 4>and lenders to lots of companies and markets impact us.

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<v Speaker 3>And what I'd say is we try to take.

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<v Speaker 4>A little bit of a longer term perspective that there

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<v Speaker 4>is tariff diplomacy going on, and that what is happening

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<v Speaker 4>now could change depending on what market participants, what government

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<v Speaker 4>officials do and you've got to take that longer term

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<v Speaker 4>approach and hope or maybe expect at some point that

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<v Speaker 4>they'll get to outcomes.

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<v Speaker 3>Markets will calm and actually, in.

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<v Speaker 4>A moment like this, you look around and say, are

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<v Speaker 4>there good businesses that are now on sale? We can

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<v Speaker 4>deploy capital into this volatility. So I would just say

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<v Speaker 4>to investors be a little bit patient here. Let this

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<v Speaker 4>tariff diplomacy play out a bit.

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<v Speaker 1>So as you look across the universe and try to

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<v Speaker 1>find things on sale, what are you finding?

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<v Speaker 4>Well, I don't know if you know, it's so short

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<v Speaker 4>term right now what's happened. But in terms of the

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<v Speaker 4>areas we find most interesting, we love to be thematic

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<v Speaker 4>in what we do think about sectors where there are

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<v Speaker 4>long term tailwinds that are quite compelling. So digital infrastructure

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<v Speaker 4>has been a huge theme for US data centers. We've

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<v Speaker 4>been the leading investor in the world in that area.

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<v Speaker 4>There's obviously been concerned given deep seek, but we continue

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<v Speaker 4>to see big demand throughout that whole sort of value chain.

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<v Speaker 4>We love power and energy. We think we're moving to

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<v Speaker 4>a world of very heavy electrification. It's because of data centers, reindustrialization, robotics,

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<v Speaker 4>ultimately We invest in generation transmission utility services. We like

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<v Speaker 4>franchise businesses that are capital likee we bought in the

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<v Speaker 4>last year Jersey Mics. We bought Tropical Smoothie. We bought

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<v Speaker 4>a small coffee chain called seven Brew. We love the

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<v Speaker 4>alternative space stakes and other managers, secondaries, lending to private

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<v Speaker 4>equity firms. And geographically, I would say also India is

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<v Speaker 4>a really interesting place for us where we've leaned in

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<v Speaker 4>where we think there's a long runway.

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<v Speaker 3>The last one I.

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<v Speaker 4>Just threw out is a cyclical recovery and commercial real estate,

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<v Speaker 4>which we're big believers.

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<v Speaker 3>In it and have been deployed capital.

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<v Speaker 1>So big picture as well, people are talking about a

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<v Speaker 1>return of the deal environment. People are talking about the

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<v Speaker 1>return of an IPO environment. In the IPO space in particular,

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<v Speaker 1>it's been almost stunning how slow it's been this year.

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<v Speaker 1>Isn't it a big problem if this doesn't come back

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<v Speaker 1>sometime soon. There are a lot of companies out there

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<v Speaker 1>that have been holding assets for a long time.

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<v Speaker 3>Yeah.

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<v Speaker 4>The IPO market and the M and A market, as

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<v Speaker 4>you know, Shanali, are pretty cyclical, and we've been through

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<v Speaker 4>a rough period of time. Right we saw the costs

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<v Speaker 4>of capital go up globally. As rates went up a bunch,

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<v Speaker 4>as central banks tighten to fight inflation, we saw spreads

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<v Speaker 4>go up a bunch.

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<v Speaker 3>Market participants became cautious.

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<v Speaker 4>We had a regular platory environment that was not that

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<v Speaker 4>friendly towards M and A activity, particularly from strategics, and

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<v Speaker 4>I think we're beginning to see a lot of that change.

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<v Speaker 4>We've seen credit spreads tighten a bunch, both investment grade

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<v Speaker 4>and not investment grade. The stock market, even with this

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<v Speaker 4>recent tradeoff, I think, is up about fifty percent from

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<v Speaker 4>two years ago levels. You know, I think there's a

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<v Speaker 4>pent up desire to do transactions and IPOs. When you

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<v Speaker 4>have a stock market trading well, it's like a magnet.

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<v Speaker 4>It starts to pull companies in as well. We've got

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<v Speaker 4>a number of businesses that we're looking to take public

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<v Speaker 4>this year. I think there's a receptivity to IPOs, but

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<v Speaker 4>volatility like this week can slow things in the near term.

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<v Speaker 4>But if you said, look, twenty four was an increase

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<v Speaker 4>both in IPOs and m and A over twenty three,

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<v Speaker 4>I think you'll see the same thing in twenty five.

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<v Speaker 3>And there's sort of a mean reversion in terms of

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<v Speaker 3>activity levels.

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<v Speaker 4>IPOs or M and A is a percent of the

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<v Speaker 4>public markets value and we're below that, and there's just

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<v Speaker 4>a lot of pent up demand looking for liquidity.

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<v Speaker 3>I think it will come. I think high quality.

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<v Speaker 4>Businesses want to be owned in the public markets. And

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<v Speaker 4>this week it may not feel as good, but I

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<v Speaker 4>think when we finish the year, it'll be a better

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<v Speaker 4>year in terms of activity.

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<v Speaker 1>End of the year's a long way away still, John,

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<v Speaker 1>I was just saying cumulatively, but yes, but to that end,

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<v Speaker 1>you know, if we think about what happened this week,

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<v Speaker 1>you know, if you looked behind the green room, a

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<v Speaker 1>lot of people, one by one are looking at their phones,

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<v Speaker 1>looking at the stock prices of their own firms and others.

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<v Speaker 1>And it's been pretty ugly. Yesterday was the worst day

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<v Speaker 1>for the S and P this year. We've erased everything

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<v Speaker 1>that we've seen the market gain since the election. Do

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<v Speaker 1>you think that risk appetite could be significantly stunted in

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<v Speaker 1>the near term?

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<v Speaker 4>In the near term, certainly, when you have these moments,

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<v Speaker 4>investors tend to step back. Market participants say, well, do

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<v Speaker 4>we want to make that big commitment today?

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<v Speaker 3>Is the world more uncertain?

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<v Speaker 4>But we've seen these periods of time, and again I

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<v Speaker 4>like to look at the bigger picture and what we

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<v Speaker 4>see out there is still a decent economy. Right in

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<v Speaker 4>the fourth quarter, our private equity companies grew seven percent

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<v Speaker 4>in terms of revenues. We sell very low default rates

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<v Speaker 4>amongst our private equity firms that we lend to today,

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<v Speaker 4>non investment grade lending. Our CEOs, when we ask them

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<v Speaker 4>at the end of the year, do they see a

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<v Speaker 4>recession zero percent in the US, said yes over the

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<v Speaker 4>next twelve months.

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<v Speaker 3>And we see inflation continuing to moderate.

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<v Speaker 4>So shelter costs, the biggest component of CPI, is running

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<v Speaker 4>well below the government's four and a half percent data,

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<v Speaker 4>which tends to lag. Input costs are still pretty flat.

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<v Speaker 4>And when we look at our companies and ask them

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<v Speaker 4>is it hard to hire, they say it's the easiest

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<v Speaker 4>that's been in a few years. And so that combination

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<v Speaker 4>of a healthy economy, some weakness certainly on the consumer side,

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<v Speaker 4>but overall pretty good in the US, and inflation that

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<v Speaker 4>is moderating. Maybe the pace of disinflation isn't as fast.

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<v Speaker 3>As it was a year ago.

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<v Speaker 4>That should give the Fed some room to bring rates down.

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<v Speaker 3>They'll do it very gradually. That's a pretty good backdrop,

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<v Speaker 3>So that gives.

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<v Speaker 4>Me more confidence again why I think we'll see this

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<v Speaker 4>pickup in activity.

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<v Speaker 1>There might be a silver lining to your point on

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<v Speaker 1>the FED potentially cutting interest rates gradually. Every morning, the

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<v Speaker 1>first thing I do is look at the tenure yields.

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<v Speaker 1>We are down to four point one percent, which feels

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<v Speaker 1>pretty stunning given we were flirting with five percent not

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<v Speaker 1>too long ago, or five percent was a dangerous level

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<v Speaker 1>that investors were talking about in January, potentially hitting your

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<v Speaker 1>big investor in real estate. What does that mean for

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<v Speaker 1>the pressure that might be eased across the real estate industry,

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<v Speaker 1>particularly the hardest hit parts.

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<v Speaker 4>Well, I'd start with sort of the bigger picture on

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<v Speaker 4>real estate, which is we've been through a tough period

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<v Speaker 4>of time. Right the sharp upward movement and rates hit,

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<v Speaker 4>real estate values hit multiples, cap rates went up in

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<v Speaker 4>real estate spreads, borrowing costs went up a bunch, and

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<v Speaker 4>in the office sector in particular because of remote work,

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<v Speaker 4>we saw a sharp decline in demand and so that

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<v Speaker 4>created a very tough period for valuations. I think we're

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<v Speaker 4>on the other side of that. You and I have

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<v Speaker 4>talked about that over time and you know, the.

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<v Speaker 3>Question is should I be an investor in real estate?

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<v Speaker 4>And what I'd say is, you know, whenever you have

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<v Speaker 4>a sharp decline in value and then people stop building

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<v Speaker 4>new real estate. We've seen two thirds decline and apartment

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<v Speaker 4>building and warehouse building, then it's generally a good time

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<v Speaker 4>to invest. And the real question is the pace of

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<v Speaker 4>the recovery and value. If it comes purely from cash

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<v Speaker 4>flow growth, it may take a little more time. If

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<v Speaker 4>rates fall as they have, then you may see an

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<v Speaker 4>acceleration in multiples and it'll happen more quickly.

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<v Speaker 3>But the path of travel in real estate is upwards.

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<v Speaker 3>So we've been leaning in quite a bit.

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<v Speaker 4>We privatize a number of large companies last year. Clearly

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<v Speaker 4>real estate is a sector that's going to benefit from

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<v Speaker 4>a lower cost of capital.

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<v Speaker 3>But even if it.

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<v Speaker 4>Goes back up the ten year, I still think the

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<v Speaker 4>path is very positive, just given the lack of new

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<v Speaker 4>building in the space, which creates the ground really to

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<v Speaker 4>have positive cash flow growth going forward.

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<v Speaker 1>I'm going to give you what I think might be

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<v Speaker 1>a tough question for you in the world of real estate,

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<v Speaker 1>which is your favorite child data centers or offices At

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<v Speaker 1>the moment in terms of the near term ability to

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<v Speaker 1>put money to work.

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<v Speaker 3>It's an interesting question.

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<v Speaker 4>I think from a value standpoint today, offices are pretty

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<v Speaker 4>compelling in a place like New York City or San Francisco,

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<v Speaker 4>because in New York you have financial services firms who

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<v Speaker 4>are growing rapidly.

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<v Speaker 3>You don't have any new building.

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<v Speaker 4>In San Francisco, the values fell very hard in some

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<v Speaker 4>cases seventy five percent, and AI and technology innovation really

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<v Speaker 4>housed in San Francisco.

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<v Speaker 3>And so I think in.

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<v Speaker 4>Some of these markets now, given the sharp decline and

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<v Speaker 4>value and the lack of new supply, office buildings become interesting.

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<v Speaker 3>You definitely want to buy more modern buildings.

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<v Speaker 4>But I still like the data centers too. They're what's

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<v Speaker 4>attractive is this need for compute power.

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<v Speaker 3>I reference Deep Seek. But obviously the cost.

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<v Speaker 4>Of compute has come down pretty dramatically, and we think

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<v Speaker 4>the usage is going to go up. There may need

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<v Speaker 4>to be a little less training, and it may be

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<v Speaker 4>more inference, but our lives are migrating online, and I

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<v Speaker 4>think these data centers are a critical part.

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<v Speaker 3>Of that infrastructure. So I'd say I like both of

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<v Speaker 3>these children.

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<v Speaker 1>So on data centers in particular, the estimates are staggering.

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<v Speaker 1>But they're not only staggering, they're all over the place.

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<v Speaker 1>You've seen estimates from a need for a trillion dollars

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<v Speaker 1>or three trillion dollars globally to build data centers. You've

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<v Speaker 1>seen estimates higher than ten trillion dollars. Both things can't

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<v Speaker 1>be true.

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<v Speaker 3>Well, I think it's a question of what you're measuring.

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<v Speaker 4>If it's just the physical data centers, it's probably on

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<v Speaker 4>the lower end. But if you're talking about the GPUs

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<v Speaker 4>that go in those data centers or the power that

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<v Speaker 4>needs to go, then those numbers get really large, and

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<v Speaker 4>then I'd be at the higher end.

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<v Speaker 3>And it's a global phenomenon. I mean, if you think.

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<v Speaker 4>About where the world's going, I think our lives are

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<v Speaker 4>going to be so impacted by this technology. What we do,

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<v Speaker 4>how companies function, coding, customer engagement, even things like translation.

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<v Speaker 4>Today now you don't even need translation anymore because the

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<v Speaker 4>machines can do at real time. I think margins and

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<v Speaker 4>companies are going to expand dramatically.

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<v Speaker 3>I think we're going to use these.

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<v Speaker 4>Bots to help us do so many things in our lives,

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<v Speaker 4>and so ultimately, I think the infrastructure spend against this

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<v Speaker 4>will be quite significant. I'm not a student enough or

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<v Speaker 4>knowledgeable enough to know exactly what the number is, but

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<v Speaker 4>it feels like it's going.

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<v Speaker 3>To be very big.

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<v Speaker 1>You know, one investor that we're speaking to tomorrow has

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<v Speaker 1>this theory where AI is going to be so productive

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<v Speaker 1>that they're betting on leisure and entertainment because they believe

0:12:31.720 --> 0:12:34.480
<v Speaker 1>the work week is going to be shorter. Do you

0:12:34.559 --> 0:12:37.240
<v Speaker 1>see that happening? And I think it matters because of

0:12:37.280 --> 0:12:39.720
<v Speaker 1>the implications it would then have across the real estate

0:12:39.760 --> 0:12:42.280
<v Speaker 1>sector and offices and all of the above.

0:12:42.760 --> 0:12:43.880
<v Speaker 3>You know, it's hard to say.

0:12:45.480 --> 0:12:48.640
<v Speaker 4>Historically, there's been a lot of prediction technology eliminates the

0:12:48.679 --> 0:12:52.720
<v Speaker 4>need for work. What it's done is eliminated, some needs,

0:12:52.760 --> 0:12:53.680
<v Speaker 4>expanded others.

0:12:54.559 --> 0:12:55.640
<v Speaker 3>I think there'll be some of that.

0:12:55.920 --> 0:12:59.080
<v Speaker 4>I think there's a potential as you get further and

0:12:59.120 --> 0:13:00.880
<v Speaker 4>further out that maybe.

0:13:00.640 --> 0:13:02.400
<v Speaker 3>The aggregate work hours go down.

0:13:03.520 --> 0:13:05.480
<v Speaker 4>The good news to your point is the real world

0:13:05.559 --> 0:13:09.160
<v Speaker 4>still exists, and so people are gonna do physical things

0:13:09.200 --> 0:13:13.880
<v Speaker 4>as well, and interestingly, infrastructure, which has been a great.

0:13:13.640 --> 0:13:16.439
<v Speaker 3>Area for US physical real estate, some of the.

0:13:16.480 --> 0:13:20.240
<v Speaker 4>Entertainment, amusement parks, water parks, those things are gonna stick.

0:13:20.960 --> 0:13:23.920
<v Speaker 4>You're not gonna do those virtually, I don't believe so

0:13:25.080 --> 0:13:29.400
<v Speaker 4>in the near term. I still see this technology in

0:13:29.480 --> 0:13:33.680
<v Speaker 4>many ways. It's eliminating certain jobs, but it's creating others.

0:13:34.280 --> 0:13:36.880
<v Speaker 4>And you know, we own a business ancestry dot com,

0:13:36.880 --> 0:13:38.640
<v Speaker 4>and you think about what that.

0:13:38.600 --> 0:13:41.880
<v Speaker 3>Experience could be like where it starts to create.

0:13:42.040 --> 0:13:47.040
<v Speaker 4>Movies and captures the music and the newspapers, and therefore

0:13:47.080 --> 0:13:50.080
<v Speaker 4>what it's creating to the end user experience is different,

0:13:50.320 --> 0:13:53.040
<v Speaker 4>and it's going to require some human interaction as well.

0:13:53.520 --> 0:13:55.200
<v Speaker 3>Obviously other functions may not.

0:13:55.440 --> 0:13:59.480
<v Speaker 4>So I think as investors, again back to the beginning,

0:14:00.120 --> 0:14:01.800
<v Speaker 4>what's going to happen with tariffs this week?

0:14:02.040 --> 0:14:04.120
<v Speaker 3>I don't know. Will the FED cut two times or

0:14:04.160 --> 0:14:07.600
<v Speaker 3>three times? I don't know. But this technology and the

0:14:07.640 --> 0:14:08.360
<v Speaker 3>way it's going to.

0:14:08.360 --> 0:14:11.880
<v Speaker 4>Change our lives, I think that's profound, and thinking about

0:14:11.960 --> 0:14:15.640
<v Speaker 4>these kind of big trends, that's what I'd focus on

0:14:15.720 --> 0:14:16.480
<v Speaker 4>as an investor.

0:14:16.640 --> 0:14:18.120
<v Speaker 1>I want to ask you about a part of your

0:14:18.120 --> 0:14:20.760
<v Speaker 1>business that I don't think that people ask you about enough.

0:14:21.400 --> 0:14:24.080
<v Speaker 1>It's the business of hedge funds. We just heard from

0:14:24.120 --> 0:14:26.720
<v Speaker 1>Don Fitzpatrick on the big picture here in terms of

0:14:27.120 --> 0:14:29.320
<v Speaker 1>where the industry is going and how the multastrats are

0:14:29.320 --> 0:14:31.880
<v Speaker 1>getting so big, but you seem to be finding a

0:14:31.880 --> 0:14:33.400
<v Speaker 1>lot of opportunity elsewhere.

0:14:34.360 --> 0:14:35.359
<v Speaker 3>Yeah, it's interesting.

0:14:35.560 --> 0:14:40.200
<v Speaker 4>So our hedge fund business is primarily focused on absolute returns.

0:14:40.480 --> 0:14:44.640
<v Speaker 4>The division is called BXMA for US. It manages a

0:14:44.640 --> 0:14:47.520
<v Speaker 4>little more than eighty billion dollars of the capital. Joe Dowling,

0:14:47.760 --> 0:14:50.200
<v Speaker 4>who ran the Brown Endowment and was a hedge fund

0:14:50.280 --> 0:14:54.480
<v Speaker 4>manager himself, runs the business. And what we're really focused

0:14:54.520 --> 0:14:58.560
<v Speaker 4>on there is cutting off the downside for our investors

0:14:59.360 --> 0:15:02.680
<v Speaker 4>and having things that are not correlated with stocks and bonds,

0:15:02.720 --> 0:15:05.720
<v Speaker 4>because our investors already have a lot of that, doing

0:15:05.720 --> 0:15:08.800
<v Speaker 4>it in a liquid way and still delivering an attractive

0:15:08.840 --> 0:15:09.720
<v Speaker 4>absolute return.

0:15:10.040 --> 0:15:11.320
<v Speaker 3>And we managed to do that.

0:15:11.560 --> 0:15:14.400
<v Speaker 4>So since Joe joined us four years ago, we haven't

0:15:14.440 --> 0:15:18.800
<v Speaker 4>had a down quarter. We've outperformed sixty forty by fifteen

0:15:18.880 --> 0:15:22.080
<v Speaker 4>hundred basis points. Last year we were up twelve percent

0:15:22.200 --> 0:15:25.360
<v Speaker 4>net and we're doing it in this very uncorrelated way.

0:15:25.400 --> 0:15:27.920
<v Speaker 4>And I think as cost of capital comes down, as

0:15:27.920 --> 0:15:30.720
<v Speaker 4>base rates come down, I think investors will look for

0:15:30.800 --> 0:15:34.240
<v Speaker 4>things like this as an area. I think historically in

0:15:34.280 --> 0:15:37.160
<v Speaker 4>the old long short equity days, people were looking for

0:15:37.280 --> 0:15:41.720
<v Speaker 4>hedge funds to outperform equities and have downside protection. I

0:15:41.760 --> 0:15:44.680
<v Speaker 4>think the business has evolved and if you can have

0:15:44.800 --> 0:15:47.480
<v Speaker 4>this piece of your portfolio's ballast, it makes a lot

0:15:47.520 --> 0:15:49.920
<v Speaker 4>of sense. A number of the biggest endowments have as

0:15:49.960 --> 0:15:53.040
<v Speaker 4>much as twenty percent in absolute returns. So this is

0:15:53.080 --> 0:15:56.200
<v Speaker 4>an area we really like, and like everything in our

0:15:56.240 --> 0:15:58.840
<v Speaker 4>business if we deliver good returns, if we deliver for

0:15:58.920 --> 0:16:01.320
<v Speaker 4>our customers to attract capital, and.

0:16:01.200 --> 0:16:01.760
<v Speaker 3>That's the key.

0:16:01.880 --> 0:16:04.160
<v Speaker 1>But are you willing to fight against the notion then

0:16:04.240 --> 0:16:06.760
<v Speaker 1>that it's a multistrat or nothing in this environment.

0:16:07.600 --> 0:16:10.120
<v Speaker 4>Well, I think the multishrets have done a great job.

0:16:10.840 --> 0:16:12.640
<v Speaker 3>I mean, if you look at Ken.

0:16:12.400 --> 0:16:15.280
<v Speaker 4>And Izzy and the businesses they built and the performance,

0:16:15.920 --> 0:16:17.000
<v Speaker 4>you can't argue with that.

0:16:17.520 --> 0:16:20.360
<v Speaker 3>But it's a big world and we can do.

0:16:20.280 --> 0:16:23.440
<v Speaker 4>Things a little bit differently. Our approach is different. We

0:16:23.480 --> 0:16:26.520
<v Speaker 4>think we can offer something attractive to clients and if

0:16:26.560 --> 0:16:29.160
<v Speaker 4>we do that, we think we'll find capital. And it

0:16:29.160 --> 0:16:33.640
<v Speaker 4>can be across quant and macro and long short equity

0:16:33.760 --> 0:16:36.600
<v Speaker 4>and credit. And if you can deliver investors a basket

0:16:36.640 --> 0:16:40.360
<v Speaker 4>of that uncorrelated with an attractive absolute return, I think

0:16:40.440 --> 0:16:42.040
<v Speaker 4>that's something that you do quite well.

0:16:42.480 --> 0:16:44.960
<v Speaker 1>So we have spent a lot of this time thinking

0:16:44.960 --> 0:16:48.360
<v Speaker 1>about investment opportunities that exist in today's environment. If you

0:16:48.400 --> 0:16:52.280
<v Speaker 1>can name probably the biggest shift heading into the next

0:16:52.320 --> 0:16:55.600
<v Speaker 1>couple of years that you're trying to capitalize on, what

0:16:55.760 --> 0:16:56.560
<v Speaker 1>exactly is it?

0:16:57.240 --> 0:17:01.480
<v Speaker 4>So in our business, I'd say it's a couple of things. First,

0:17:01.520 --> 0:17:05.679
<v Speaker 4>it's the movement to private credit, which is essentially bringing

0:17:05.800 --> 0:17:10.360
<v Speaker 4>investors directly up to borrowers. It could be non investment

0:17:10.400 --> 0:17:14.720
<v Speaker 4>grade direct lending or investment grade in many cases insurance

0:17:14.760 --> 0:17:19.879
<v Speaker 4>companies doing things like consumer loans and infrastructure loans and

0:17:20.080 --> 0:17:23.840
<v Speaker 4>energy loans, fun finance, and in that process of bringing

0:17:23.880 --> 0:17:27.280
<v Speaker 4>them sort of farm to table, you can generate higher returns.

0:17:27.920 --> 0:17:31.200
<v Speaker 4>And we're seeing, you know, where's in the equity bucket

0:17:31.200 --> 0:17:35.119
<v Speaker 4>of most investors. Private assets became a very large piece

0:17:35.720 --> 0:17:39.480
<v Speaker 4>credit main was pretty much all liquid other than distressed

0:17:39.480 --> 0:17:43.679
<v Speaker 4>and opportunistic, and this feels to us like a secular.

0:17:43.240 --> 0:17:45.040
<v Speaker 3>Change with a lot of runway.

0:17:45.840 --> 0:17:48.040
<v Speaker 4>The other area I would point to would be the

0:17:48.080 --> 0:17:53.080
<v Speaker 4>individual investor. There we have grown to two hundred and

0:17:53.080 --> 0:17:59.600
<v Speaker 4>sixty billion dollars for individual investors, and again, institutions who

0:17:59.600 --> 0:18:03.880
<v Speaker 4>are are more allocated to privates. Even wealthy individuals are

0:18:03.880 --> 0:18:05.080
<v Speaker 4>only about one percent.

0:18:05.720 --> 0:18:07.480
<v Speaker 3>And so the advent of these.

0:18:07.280 --> 0:18:13.040
<v Speaker 4>Perpetual products across real estate and private equity and infrastructure

0:18:13.080 --> 0:18:15.879
<v Speaker 4>and credit, and doing it in structures that have a

0:18:15.880 --> 0:18:19.520
<v Speaker 4>little more liquidity but are still semi liquid, don't have

0:18:19.560 --> 0:18:24.399
<v Speaker 4>the draw down features. These sort of products, if we

0:18:24.440 --> 0:18:27.800
<v Speaker 4>can deliver out performance, I think will continue to be

0:18:27.960 --> 0:18:28.760
<v Speaker 4>very attractive.

0:18:29.080 --> 0:18:31.919
<v Speaker 3>They've grown quite a bit. I think they'll continue to grow.

0:18:32.440 --> 0:18:35.120
<v Speaker 4>But again in both of these areas, I'd come back

0:18:35.160 --> 0:18:37.840
<v Speaker 4>to our true north. We've got to deliver for the customers.

0:18:38.119 --> 0:18:40.600
<v Speaker 4>If we do that, I think we'll continue to see

0:18:41.320 --> 0:18:44.800
<v Speaker 4>major investors take a larger portion of their portfolio and

0:18:44.880 --> 0:18:47.280
<v Speaker 4>move it into private assets, and at Blackstone we should

0:18:47.280 --> 0:18:48.400
<v Speaker 4>benefit from that.

0:18:48.400 --> 0:18:51.679
<v Speaker 2>That was Blackstone President and COO John Gray speaking with

0:18:51.720 --> 0:18:55.200
<v Speaker 2>Bloomberg Shanali Bask at Bloomberg invest in New York