Blackstone Group, the investment giant led by Steve Schwarzman,
announced a major deal with Saudi partners during the President’s visit to Riyadh over the weekend. Schwarzman is a key outside adviser to the President.
Blackstone will launch a $US40 billion infrastructure investment vehicle, with Saudi Arabia’s Public Investment Fund contributing at least $US20 billion to the fund.
News of the deal has Blackstone’s stock climbing. It currently sits at $US32 per share, its highest point in over a year.
“New infrastructure business with staggering asset size further demonstrates Blackstone’s ability to innovate, create new businesses and leverage the brand to raise assets,” Morgan Stanley equity analyst Michael J. Cyprys said in a research note.
A Credit Suisse research report noted that Blackstone’s new infrastructure fund could eventually be three times the size of Global Infrastructure Partners’ $US15.8 billion fund, the largest infrastracture investment fund to date. Additionally, Blackstone plans to leverage the fund’s $US40 billion into over $US100 billion of investments by taking on additional debt.
Credit Suisse also sees opportunity for Blackstone should President Trump follow through on a key campaign promise, namely: increasing infrastructure spending.
“We also believe this business could benefit significantly from a new infrastructure spending plan in the US, which has been one of President Trump’s key priorities,” wrote Credit Suisse.
Blackstone CEO Steve Schwarzman has been acting as an outside adviser for the Trump White House, and serves as the chair of the president’s strategy and policy forum, a panel of business leaders including JPMorgan Chase CEO Jamie Dimon and BlackRock CEO Laurence Fink.
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