Betting big on the Indian growth story, US private equity major Blackstone intends to invest $2 billion per annum and garner an additional portfolio of $25 billion over the next five years.
The firm, which has been present in the country for 20 years, recommends a slew of measures such as faster approvals for M&A deals and simplification of privatisation laws, its president and chief operating officer Jonathan D Gray said.
“India has been a leader for us in terms of performance in private equity, with our highest returns coming in from the country.
“We have also done incredibly well in real estate space. Building businesses that build India is the core theme at Blackstone,” Gray told reporters here in Mumbai.
“The demographics are obviously good; 1.4 billon people, young population, second most English-speaking country, have the most number of engineers in the world, incredible strength in IT services, among others.”
Reforms in GST, bankruptcy laws and public markets and an ever-improving infrastructure are making the country an investment destination, he added.
The firm, which has about $50 billion of private equity and real assets in India, had crossed $1 trillion in total assets under management globally last year. The firm also has $200 billion of dry powder.
Blackstone plans to invest about $2 billion every year in India for the next five years, senior managing director Amit Dixit said, adding, it has already assets $50 billion in the country till now.
Further, the firm expects its value of assets to rise by $25 billion over time, including $17 billion in fresh bets and up to $7.5 billion value creation across portfolio companies, Dixit said. The present value of its assets is at about $30 billion.
“We are focused on performance, and if we deliver good returns people will come back to us. The other important point is innovation,” Gray added.
According to Gray, further reforms on M&A front (which now takes up to two years to complete a deal in the country, compared with weeks in the US) and privatising a listed entity (which require 90% of shareholders approvals, would the help the country attract more capital.
The 90% approvals needed are “mathematically impossible”. Reforms such as allowing public funds to invest in real estate investment trusts are also needed.
In India, Blackstone would continue investing in infrastructure sector, apart from real estate, logistics, data centres, hospitality, energy transition and themes helping the growth of middle class such as healthcare, financial services and travel.
Talking global investment scenario, Gray said that the good news globally is there is “resilient growth” across the world. “The US has grown faster than people expected, which has been pretty much true for the rest of the world. Obviously, China has its own challenges, Europe is doing better. So, overall it is a much better picture than expected”.