Blackstone sees opportunities in China's 'economic dislocations'

Speaking in Beijing on Thursday, Schwarzman explained that Blackstone likes to invest when others are pessimistic. "When most people are scared and leaving, we try to see what will change positively," he said, China Daily reported.

Other private equity firms are also readying themselves to target Chinese companies that run into financial difficulty, with KKR preparing to expand its special situations vehicle into Hong Kong in the next 6-9 months.

Blackstone doesn't plan on increasing its exposure to the Chinese property market due to high prices. However, Antony Leung, Blackstone's chairman for Greater China, said the long-term prospects for real estate remain strong due to ongoing urbanization.

Last month the company exited its first property investment in China, selling its 95% stake in Shanghai's Channel 1 shopping mall to Hong Kong-based property group New World Development for RMB1.46 billion ($229 million).

Blackstone entered China in 2007 and has so far made a dozen investments, including the $600 million purchase of a 20% stake in Bluestar, a subsidiary of China National Chemical Corp. Last year it paid $194 million for around 10% of vegetable trading firm Dili Group in what was supposed to be a pre-IPO investment, but sold out after reportedly being warned that its involvement would complicate moves to raise prices.

The private equity firm has reached the halfway point in fundraising for its RMB5 billion debut renminbi-denominated fund. The joint venture vehicle, known as Shanghai Blackstone Equity Investment Partnership, reached a first close in April, having received commitments from Chinese government entities, state-owned enterprises, and large domestic corporations.

Leung said that the renminbi fund had already made several investments and that talks were ongoing to get the National Council for Social Security Fund to become an LP.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Buyout
• Real estate
• Renminbi fund
• Restructuring
• China
• The Blackstone Group
• Real estate
• Distress
• RMB fund
• buyout