Blackstone Group expecting more opportunities to provide credit

By Jennifer Lanning Drey

Portland, Ore., May 6 - Blackstone Group LP expects to see compelling investment opportunities in credit this year, as the bank and leveraged finance markets will likely be insufficient to absorb corporate financing needs, Stephen Schwarzman, chief executive officer of Blackstone, said Wednesday during the company's first-quarter earnings conference call.

Blackstone has formed a joint venture between its credit and private equity businesses to create solutions for some of the companies expected to need as much as $1 trillion of financing over the next five years, he said.

"While investors generally have less money to invest for sure, credit remains an area of relative interest, and we are particularly well positioned to take advantage of this," Schwarzman said.

Blackstone is likely to put out between $3 billion and $5 billion of credit this year depending on how its fundraising goes.

Geographic areas of interest for Blackstone continue to be North America, which is expected to exit the economic downturn faster than Europe, and areas of Asia.

Blackstone is managing all of its businesses for what could be a protracted down cycle while simultaneously looking to identify attractive investment opportunities, Schwarzman said.

Generally speaking, healthy, non-cyclical companies are currently providing some of the most attractive risk-adjusted rewards, he said.

The pace of Blackstone's capital deployment into private equity is expected to be similar to that of 2008, while the company is staying on the sidelines in real estate until it sees a bottoming or crack in the debt markets.

Blackstone is a New York-based alternative asset manager and provider of financial advisory services.

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