The Connection
From our unique private market vantage, we can draw lines between macro, market and investment trends and help investors see how it all connects.
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Irony, Optimism, and AI
by Joe Zidle, Chief Investment Strategist, Private Wealth Solutions
An irony of new technology is that no matter how disruptive it is, traditional economic forces determine its trajectory and economic impact. In my view, understanding this dynamic is key to skillful asset allocation in the next cycle.
Accelerating Value with AI
by Matt Katz, Senior Managing Director, Global Head of Data Science
The private equity landscape has undergone seismic shifts in Blackstone’s almost four-decade history. Our objective has always been the same, though: to deliver for our investors. What has evolved over time is how we deliver. Today, we see AI as a principle means of adding value to our companies and helping them accelerate growth.
Manager Selection is Key in Private Markets
by Anders Nielsen, Managing Director, Private Wealth Solutions
Brendan Conway, Principal, Private Wealth Solutions
In the January issue of the Connection, we argued that the current uncertain macro environment is a good time to shift portfolios towards a higher strategic allocation to private assets. Each of the major private asset classes offers unique features which add arrows to an investor’s quiver that are particularly valuable in uncertain times.
Through the Private Market Lens
Blackstone’s global portfolio spans more than 230 companies employing over 700,000 people. Each quarter, led by Prakash Melwani, CIO of Corporate Private Equity, we survey a sample of these companies’ CEOs on the current business environment and what they see on the horizon. Explore a few key findings from our Q1 2024 survey of 83 Blackstone portfolio company CEOs (53 US CEOs).
CEOs don’t see the economy tipping to a recession
Only 17% of CEOs think there will be a recession in the next 12 months (US companies only).
CEOs think that business conditions over the next six months will:
And margins are still expanding
Do you expect operating margins in 2024 to be higher or lower than in 2023?
Do you expect operating margins in 2025 to be higher or lower than in 2024?
However, CEOs believe that disinflation has slowed
CEOs are optimistic about the benefits AI will have on their business
What impact do you believe AI services will have on your business?1
- This question prompted CEOs to select all answers that apply. As such, percentages may sum to >100%.
Note: See “Important Disclosures” for additional information about the survey and the views expressed within.
The Blackstone CEO survey referred to herein is a survey of a subset of portfolio company CEOs. For 1Q24, the survey reflects responses from 83 Blackstone portfolio company CEOs (53 US CEOs) largely within Blackstone’s private equity, real estate and credit & insurance businesses (the “CEO Survey”). Note that survey composition varies from quarter to quarter. The CEO Survey was initiated on March 7, 2024 and closed March 20, 2024. Quarter-over-quarter presentations reflect data only for companies who responded to the survey question in both quarters, which may result in a smaller subset of portfolio companies CEOs represented in such presentation than the overall CEO Survey. The responding portfolio companies are not necessarily a representative sample of companies across Blackstone’s portfolio and the views expressed do not necessarily reflect the views of Blackstone. The views expressed reflect the responding CEOs’ views as of the date of their responses, and Blackstone does not undertake any responsibility to advise you of any changes in such views. References to “CEO” or “CEOs” herein refer to respondents to the 1Q24 Blackstone CEO survey. Note: See “Important Disclosures” for additional information about the survey and the views expressed within.
Forward-Looking Statements. This content may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “scheduled,” “estimates,” “anticipates,” “opportunity,” “leads,” “forecast” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors include but are not limited to those described under the section entitled “Risk Factors” in Blackstone Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022, as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our other periodic filings. The forward-looking statements speak only as of the date hereof, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
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Authors
Joe Zidle
Chief Investment Strategist, Private Wealth Solutions
David Stubbs
Managing Director, Private Wealth Solutions
Anders Nielsen
Managing Director, Private Wealth Solutions
Kristin Roesch
Vice President, Private Wealth Solutions
Anav Bagla
Analyst, Private Wealth Solutions
Important Disclosure Information
The views expressed in this commentary are the personal views of the authors and do not necessarily reflect the views of Blackstone. The views expressed reflect the current views of the authors as of the date hereof, and neither the authors nor Blackstone undertake any responsibility to advise you of any changes in the views expressed herein.
Blackstone and others associated with it may have positions in and effect transactions in securities of companies mentioned or indirectly referenced in this commentary and may also perform or seek to perform services for those companies. Blackstone and others associated with it may also offer strategies to third parties for compensation within those asset classes mentioned or described in this commentary. Investment concepts mentioned in this commentary may be unsuitable for investors depending on their specific investment objectives and financial position.
Tax considerations, margin requirements, commissions and other transaction costs may significantly affect the economic consequences of any transaction concepts referenced in this commentary and should be reviewed carefully with one’s investment and tax advisors. All information in this commentary is believed to be reliable as of the date on which this commentary was issued, and has been obtained from public sources believed to be reliable. No representation or warranty, either express or implied, is provided in relation to the accuracy or completeness of the information contained herein.
This commentary does not constitute an offer to sell any securities or the solicitation of an offer to purchase any securities. This commentary discusses broad market, industry or sector trends, or other general economic, market or political conditions and has not been provided in a fiduciary capacity under ERISA and should not be construed as research, investment advice, or any investment recommendation. Past performance does not predict future returns.