(Bloomberg) — Blackstone Inc. has amassed $11 billion to buy companies in Asia after raising its second private-equity fund for the region, nearly tripling its previous pool of capital raised in 2018.
The world’s largest alternative asset manager raised $6.4 billion and will receive an additional $4.6 billion from Blackstone global funds for the pool, said Amit Dixit, the Asia head of private equity, in an interview. Since 2018, the firm has invested in deals valued at $20 billion in Asia, half which was done last year.
Blackstone is doubling down in Asia despite increasing risks from inflation and geopolitical tension. While global markets have plunged this year amid concerns over increasing interest rates, the selloff could present a good time to step in for investors flush with cash.
“As the year unfolds, we’ll see very attractive opportunities,” Dixit said.
Almost 100% of the investors in the first fund chose to take part in the latest fundraising, lured by consistent returns, geographical diversification and an increased focus on environment and social governance, according to Dixit.
Globally, the New York-based asset manager hauled in a record $155 billion in the fourth quarter, putting it ahead of schedule on its goal of managing $1 trillion by 2026. Its distributable earnings rose 55% to a record $2.3 billion in the fourth quarter. Still, President Jon Gray last week warned investors to brace for a slowdown in deal activity in technology and fast-growing companies as the market reprices assets after the recent stock plunge.
While the first Asia private-equity fund is “quite India heavy,” the second will have a mix of investments across Asia-Pacific, Dixit said. It’s currently working on three advanced deals in Australia, Japan and India and is doing due diligence on a Chinese consumer company as well as a Korean firm, he said.
It was involved in 8 transactions last year, including in Singaporean precision components firm Interplex, India’s VFS Global, a visa outsourcing service provider, and Nucleus Network, Australia’s largest phase one clinical trials provider.
The Focus
Its focus on transforming traditional automotive, education and outsourcing businesses into technology-driven companies such as electrical vehicles, ed-tech and cloud migration has contributed to several successful exits, Dixit said, declining to provide return figures, citing confidentiality.
“We only buy what we can build,” he said. “It’s not good enough to make it efficient, it’s important to grow.”
Asia will benefit from conglomerates continuing to divest non-core assets, founders seeking successions and the availability of attractive financing, Dixit said.
The firm isn’t deterred by China’s crackdown on technology and other parts of the private sector. It will continue to invest in health care technology and artificial intelligence, including robotics and machine-learning, across the region. Companies focusing on climate change and renewable energy in Asia also offer good opportunities, he said.
“Government related issues play a little role in our decision making,” he said. “Our strategy is very micro.”
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