1 00:00:00,080 --> 00:00:02,120 Speaker 1: We are delighted to be joined by Steve Schwartzman of 2 00:00:02,160 --> 00:00:05,560 Speaker 1: course Blackstone. Steve, thank you. You were just on stage 3 00:00:05,559 --> 00:00:07,720 Speaker 1: with the Prime Minister. Issy say nak, how much are 4 00:00:07,720 --> 00:00:09,760 Speaker 1: you putting in the UK? What are you most excited 5 00:00:09,760 --> 00:00:11,280 Speaker 1: about when it comes to the UK growth. 6 00:00:11,400 --> 00:00:14,400 Speaker 2: Well, we've been putting a lot of money into the UK. 7 00:00:14,600 --> 00:00:17,960 Speaker 2: First of all, we're doing our headquarters building here, which 8 00:00:18,000 --> 00:00:20,599 Speaker 2: is a very significant size building. It will be the 9 00:00:20,680 --> 00:00:24,840 Speaker 2: largest built in the Mayfair area in the last several decades. 10 00:00:25,920 --> 00:00:30,000 Speaker 2: We've bought two companies in the last two weeks in 11 00:00:30,040 --> 00:00:34,120 Speaker 2: the United States in the UK and you know we 12 00:00:34,640 --> 00:00:40,320 Speaker 2: have a total of seventy billion pounds that's close to 13 00:00:41,680 --> 00:00:46,240 Speaker 2: ninety billion dollars of investments in the UK with thirty 14 00:00:46,240 --> 00:00:50,680 Speaker 2: seven thousand people working in these companies in real estate. 15 00:00:50,880 --> 00:00:53,400 Speaker 1: Steve, what stands out as the biggest strength actually for 16 00:00:53,440 --> 00:00:55,520 Speaker 1: the UK. So there are many questions. There was an 17 00:00:55,560 --> 00:00:58,240 Speaker 1: autumn statement for not sure how they're going to fund 18 00:00:58,280 --> 00:01:00,520 Speaker 1: some of the tax cuts if they continue to the road, 19 00:01:00,800 --> 00:01:02,880 Speaker 1: and we don't know if the Conservatives are in power 20 00:01:03,240 --> 00:01:03,920 Speaker 1: in top months. 21 00:01:04,240 --> 00:01:05,080 Speaker 3: Well, the big. 22 00:01:04,959 --> 00:01:10,280 Speaker 2: Advantages of the UK are the English language, the rule 23 00:01:10,319 --> 00:01:16,320 Speaker 2: of law. They have a terrific university system. They have 24 00:01:16,880 --> 00:01:25,000 Speaker 2: great life science areas. They're the number one tourist area 25 00:01:25,600 --> 00:01:31,200 Speaker 2: in Europe, which actually I found surprising, and so they 26 00:01:31,200 --> 00:01:34,960 Speaker 2: have a lot of pockets of strength. They've been through 27 00:01:35,000 --> 00:01:40,240 Speaker 2: a complex time politically, but if you look longer term, 28 00:01:41,040 --> 00:01:42,240 Speaker 2: the rule of law. 29 00:01:43,720 --> 00:01:45,600 Speaker 3: In the UK is very strong. 30 00:01:46,080 --> 00:01:52,200 Speaker 2: Their regulatory posture has been quite consistent over time. But 31 00:01:52,280 --> 00:01:58,360 Speaker 2: we forget that these are good things and not all 32 00:01:58,440 --> 00:02:02,920 Speaker 2: places in the world have them, and so I think 33 00:02:03,920 --> 00:02:08,880 Speaker 2: I'm not an expert on the UK, you know, sort 34 00:02:08,919 --> 00:02:12,359 Speaker 2: of laws in the sense of what they're doing politically. 35 00:02:12,400 --> 00:02:16,760 Speaker 2: I think their autumnce statement on balance, which was stimulative, 36 00:02:17,880 --> 00:02:23,400 Speaker 2: is a good and necessary thing for their economy. And 37 00:02:23,720 --> 00:02:29,280 Speaker 2: they have a much more open approach to immigration at 38 00:02:29,320 --> 00:02:34,520 Speaker 2: the top levels of education, which is good for helping to. 39 00:02:35,280 --> 00:02:37,320 Speaker 3: Power an economy. 40 00:02:38,040 --> 00:02:42,800 Speaker 2: So I think there's some interesting things going on here, Steve. 41 00:02:42,840 --> 00:02:45,160 Speaker 1: What can you tell us about private market valuations at 42 00:02:45,200 --> 00:02:49,120 Speaker 1: pe firm? So in general, do you see LPs actually 43 00:02:49,160 --> 00:02:54,080 Speaker 1: demanding more information on marks and more reporting requirements and evaluation. 44 00:02:54,240 --> 00:02:55,440 Speaker 1: Is that something that's shifting. 45 00:02:56,400 --> 00:03:03,000 Speaker 2: I don't see a big set of enormous concerns on that. 46 00:03:03,800 --> 00:03:07,400 Speaker 2: What always happens at this stage in the cycle. Uh, 47 00:03:08,120 --> 00:03:11,040 Speaker 2: you know, when you go to very high interest rates 48 00:03:11,840 --> 00:03:15,560 Speaker 2: and the world sort of starts slowing down, is that 49 00:03:16,320 --> 00:03:20,200 Speaker 2: deals slow down. So for LPs, their biggest concern is 50 00:03:20,200 --> 00:03:24,520 Speaker 2: they're not getting capital flows back that they normally were 51 00:03:24,560 --> 00:03:30,560 Speaker 2: depending on. Two people aren't selling assets. These type of 52 00:03:30,639 --> 00:03:35,160 Speaker 2: cycles always end and things returns to normal. 53 00:03:35,680 --> 00:03:40,360 Speaker 3: It's quite interesting that, you know, we just did. 54 00:03:40,400 --> 00:03:43,960 Speaker 2: Two deals in the UK in the last two weeks, 55 00:03:43,960 --> 00:03:47,920 Speaker 2: and one in the affordable and what they call social 56 00:03:48,000 --> 00:03:54,480 Speaker 2: housing area, one in computer software. Both are million billion 57 00:03:55,160 --> 00:04:01,440 Speaker 2: dollars two billion dollar type deals. We're doing a number 58 00:04:01,440 --> 00:04:04,280 Speaker 2: of things in the US now, some of which have 59 00:04:04,320 --> 00:04:08,440 Speaker 2: been announced, some of which haveen We just were involved 60 00:04:08,520 --> 00:04:13,080 Speaker 2: with a situation in Norway that's twelve billion dollars. So 61 00:04:13,800 --> 00:04:18,960 Speaker 2: the deal business is not totally in moth walls and 62 00:04:19,080 --> 00:04:23,200 Speaker 2: these things start again, and I think we're more on 63 00:04:23,279 --> 00:04:28,640 Speaker 2: that side of the cycle, although it has been you know, 64 00:04:28,800 --> 00:04:31,719 Speaker 2: somewhat dreary for a year. 65 00:04:32,400 --> 00:04:34,560 Speaker 1: In terms, for example of real estate. I think you're 66 00:04:34,720 --> 00:04:37,280 Speaker 1: raising an opportunity to stake funds ten billion. 67 00:04:37,520 --> 00:04:41,240 Speaker 2: How's that going, Well, we're raising money for a European fund. 68 00:04:41,560 --> 00:04:44,159 Speaker 2: Actually we're always raising money for a lot of funds 69 00:04:44,200 --> 00:04:47,880 Speaker 2: for scene, and you know, we've gone through a big 70 00:04:47,920 --> 00:04:53,200 Speaker 2: fund raising cycle, so we have over two hundred billion dollars. 71 00:04:53,240 --> 00:04:56,719 Speaker 2: It's one of the biggest pools of uninvested in capital 72 00:04:56,800 --> 00:05:02,880 Speaker 2: in the world and that will be deployed in due cooks. Interestingly, 73 00:05:02,920 --> 00:05:06,680 Speaker 2: in real estate, which you just asked about, we're seeing. 74 00:05:06,360 --> 00:05:11,360 Speaker 3: A good deal of volume of buying. 75 00:05:10,960 --> 00:05:16,720 Speaker 2: Things in Europe because European real estate is under pressure 76 00:05:17,720 --> 00:05:22,239 Speaker 2: in large part because interest rates were so low here 77 00:05:23,279 --> 00:05:27,120 Speaker 2: for so long. Sometimes in countries they were negative, so 78 00:05:27,240 --> 00:05:31,080 Speaker 2: the barring costs to own real estate were next to nothing, 79 00:05:31,920 --> 00:05:34,919 Speaker 2: and now it's closer to six percent. So if you 80 00:05:35,000 --> 00:05:38,239 Speaker 2: have to carry a whole portfolio that used to cost 81 00:05:38,279 --> 00:05:41,279 Speaker 2: you next to nothing at six percent, they need to 82 00:05:41,360 --> 00:05:46,520 Speaker 2: sell things, you know, it's necessary to just hold their 83 00:05:46,680 --> 00:05:47,680 Speaker 2: other properties. 84 00:05:48,040 --> 00:05:49,280 Speaker 3: And so we're seeing some. 85 00:05:49,720 --> 00:05:54,480 Speaker 2: Very very good buys in that kind of environment because 86 00:05:54,800 --> 00:05:59,520 Speaker 2: unlike most people, we have enormous capital and can buy 87 00:05:59,640 --> 00:06:05,039 Speaker 2: thees of real estate that we like, whether they're data centers, 88 00:06:05,120 --> 00:06:10,400 Speaker 2: whether they're warehouses, whether they're student housing, where those sectors 89 00:06:10,440 --> 00:06:11,520 Speaker 2: have done very well. 90 00:06:12,000 --> 00:06:14,520 Speaker 1: See what can you tell us about breats, So have 91 00:06:14,560 --> 00:06:17,760 Speaker 1: you seen any redemptions in that how's that going? 92 00:06:18,360 --> 00:06:20,160 Speaker 3: Rates? Breaks? Breaks? 93 00:06:20,279 --> 00:06:24,440 Speaker 1: How do you say b r e it you say married? 94 00:06:24,680 --> 00:06:27,400 Speaker 3: Yeah, well, those those redemptions have gone down. 95 00:06:28,680 --> 00:06:31,359 Speaker 2: You know, they're I think forty or something like that 96 00:06:31,480 --> 00:06:37,080 Speaker 2: of what they were a year ago. And so that 97 00:06:37,080 --> 00:06:40,920 Speaker 2: that fool of capital state is actually doing quite well 98 00:06:41,600 --> 00:06:44,960 Speaker 2: compared to almost all of the real estate. And so 99 00:06:46,160 --> 00:06:49,720 Speaker 2: you know, we look forward to that sort of ultimately 100 00:06:49,880 --> 00:06:53,279 Speaker 2: going back to a very normal kind of world. 101 00:06:54,160 --> 00:06:58,880 Speaker 1: Overall, does UK politics seem benign compared to the US, 102 00:06:58,960 --> 00:07:00,880 Speaker 1: but also what we saw Neolands. 103 00:07:00,600 --> 00:07:05,360 Speaker 2: Well, you know comment and politics of other countries, let 104 00:07:05,400 --> 00:07:09,920 Speaker 2: alone our own, which has a sense of drama. Uh 105 00:07:10,120 --> 00:07:15,200 Speaker 2: and and you know sort of incredulity uh is outside 106 00:07:15,200 --> 00:07:17,280 Speaker 2: of my remit fair. 107 00:07:17,560 --> 00:07:18,880 Speaker 1: Steve Schwartz will thank you so much.