What you need to know about Blackstone’s US$11 billion bet on Asia

The backstory:

• The Chinese government started a crackdown spree last year, with arguably the most notable company and entrepreneur on the receiving end of this being Alibaba Group Holding Limited’s Jack Ma.

• Since then, the crackdown has ranged across multiple industries from technology to education and more.

• This is all the while China’s President Xi has pushed the “common prosperity” rhetoric, which is pretty much the idea of making the nation more equitable and closing the gap between the ultra-rich and poor.

• Now, this political shift has irked some investors, like Softbank Group Corp.’s Masayoshi Son, who halted Chinese investments late last year because of the ambiguity. But some investors aren’t derailed, with Ray Dalio, the founder of Bridgewater Associates, applauding the country’s “common prosperity” drive.

The development:

• Before diving, an alternative asset manager invests in, as Jordan Wathen, an exotic financial expert put it, the type of assets that “the average Joe isn’t likely to own as part of their portfolio.” This includes private equity or venture capital or distressed debt and art.

• Now, with that out of the way, the world’s largest alternative asset manager, Blackstone Inc., has raised US$11 billion for its second private-equity fund for Asia, which is nearly triple its previous pool of capital raised in 2018.

• ​​According to Amit Dixit, the Head of Asia for Blackstone Private Equity, this will be for a mix of investments across Asia-Pacific. The company is currently working on three advanced deals in Australia, Japan and India and is doing due diligence on a Chinese consumer company and a Korean firm.

• “We only buy what we can build,” he said. “It’s not good enough to make it efficient, it’s important to grow.”

• The company also doesn’t worry too much about politics, with Dixit saying, “Government related issues play a little role in our decision making. Our strategy is very micro.”

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