Blackstone's global wealth push focuses on new European markets

Blackstone (NYSE) is planning to expand its private wealth business into at least two additional European markets next year, aiming to meet the rising demand among affluent individuals, two company executives informed Reuters.

The New York-based investment firm has prioritized attracting capital from wealthy investors as market volatility prompts private equity firms to diversify beyond traditional institutional clients.

Blackstone currently operates its European wealth business from offices in London, Paris, Zurich, Milan, and Frankfurt but has not disclosed which new markets it intends to enter.

The firm’s wealth products require a minimum investment between $10,000 and $25,000. Since 2020, Blackstone's global private wealth assets have surged to approximately $250 billion, now representing around 23% of its total $1.1 trillion in assets under management. However, Blackstone did not reveal its wealth asset value specifically in Europe.

Operating in Europe's diverse market with varied regulatory requirements has posed challenges. The company noted that France and Italy have shown the most significant growth in wealth, whereas Britain has been slower.

"This is not the United States of Europe. There's much more complexity, and I think Blackstone recognizes that," remarked Rashmi Madan, head of Europe, Middle East, and Africa (EMEA) in Blackstone's private wealth solutions group.

However, Madan highlighted that recent regulatory adjustments across Europe—including in the UK—are encouraging retail investment in private markets, a "positive sign" for the industry. "There is a growing shift in Europe recognizing the importance of long-term investing," she added.

Despite a trend of affluent individuals relocating since Brexit, Britain remains a key market for Blackstone’s wealth division, Madan noted, speaking prior to the recent UK budget announcement, which raised some taxes on wealthy individuals. Blackstone chose not to comment on this budget.

Supporting the expansion efforts, Blackstone recently promoted Sheila Rapple to Chief Operating Officer for EMEA Wealth. She moved to London from New York in October. "I believe there’s a huge opportunity here," Rapple commented about the European market.

BLACKSTONE'S 'EVERGREEN' FUNDS

Blackstone is focused on expanding its wealth business through semi-liquid ‘evergreen’ funds aimed at retail investors, covering private equity, credit, and real estate. Early next year, it will introduce two new credit and infrastructure funds, initially targeting the U.S. market.

These products are generally offered to affluent clients through collaborations with regional banks and wealth management firms, including French bank BNP Paribas (OTC) and Italian insurer Generali (BIT).

Investing in private markets presents challenges for retail investors, such as exposure to illiquid and complex-to-value assets. Blackstone restricted withdrawals from its $55 billion BREIT real estate fund for over a year until February, as some investors sought to exit during a downturn in the commercial property market.

Blackstone’s retail funds often have a one-to-two-year ‘soft lock’ period, allowing investors to exit early with a penalty fee. Afterward, clients can cash out monthly or quarterly, subject to fund-level limitations. Madan emphasized that this setup signals to investors "that this is an illiquid fund and you’re essentially investing in private markets."

 

 

 

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.