It's Game On For Blackstone's $5B Infrastructure Fund
Blackstone has raised $5B for its first open-ended infrastructure fund, though the investor hasn't announced any investments yet. About half of the total came from the Public Investment Fund of Saudi Arabia, while the other half is from various third-party investors.
"We’ve received broad interest from individual institutional investors around the world and have closed on $5B or so, and we expect to grow this business substantially over time," Blackstone Chairman and CEO Steve Schwarzman said during a conference call Thursday. "We are now fully in deployment mode and are evaluating a pipeline of interesting opportunities."
When asked for more detail about possible infrastructure investments, Blackstone President and Chief Operating Officer Jonathan Gray didn't give any specifics. Still, he expressed enthusiasm for the sector.
"Once you have a closed fund, it's 'game on' at that point ... we’re looking across the landscape: telecom infrastructure, water, renewables and obviously some public-to-private partnerships as well and more traditional infrastructure," Gray said.
Blackstone, which recently hired EIG Energy Global Partners' Wallace Henderson and OMERS Infrastructure's Sebastian Sherman, is ultimately seeking to build a $40B infrastructure platform, IPE Real Assets reports.
Other deep-pocketed players are in the game as well. Stonepeak Infrastructure Partners recently raised $7.2B for its latest fund, and Macquarie Infrastructure and Real Assets has raised $2.5B for its Super Core Infrastructure Fund.
Smart investments to improve the nation’s roads, ports, utilities and other vital infrastructure could unlock tremendous value for the overall economy and commercial real estate, according to JLL Chief Economist Ryan Severino.
“Infrastructure investment could provide direct economic impact in terms of job creation today,” Severino said. “But, we also can improve productivity in the long run. When airports, railways, bridges and roads work better, we’re greasing the wheels of the economy.”
A direct connection between infrastructure investment and commercial property values is hard to pin down, but property investors recognize its influence. A 2014 study by EY and the Urban Land Institute found that infrastructure is the most important factor influencing real estate investment and development decisions in cities worldwide.