Blackstone has already overtaken Blackrock in terms of market capitalization. In Switzerland the American private market specialist is approaching private banks with its products.
At the moment Blackstone's Switzerland boss Michael Mostert has only one other person working with him in Blackstone’s Zurich office. In an interview with the private equity's private wealth head Joan Solotar, finews.com learned that this might be about to change. The U.S. financial giant plans to increase the workforce in it's Private Wealth Solutions division to 300 from 200 employees worldwide by the end of 2022.
Additional jobs
Solotar's unit currently manages $166 billion in client assets – about one-fifth of the $731 billion currently under the U.S. private markets investment specialist's care. This is less than UBS's $4.5 trillion in invested assets, or the $9.5 trillion in assets under management at fund giant Blackrock.
However this year’s private equity boom has pushed Blackrock ahead of these rivals in terms of market capitalization.
On the Seine and Limmat
Besides Zurich, Blackstone is also expanding in Paris. Together with the London office, European business will be steered from these three hubs. Solotar says the location in Zurich is ideal for Blackstone, due to its proximity to the headquarters of the world's largest private bank UBS, and Credit Suisse.
These are banks that the private equity company enjoys long ties with – ties which are about to become stronger. The private wealth division of Blackstone is using the banks as distribution channels to sell its own funds to heavy private investors.
Joan Solotar (Image: Twitter)
Open Vs Closed-End funds
Blackstone’s flagship products for the wealthy are open-end funds: Unlike traditional private market vehicles that raise money from investors and then invest it for five to ten years, professional investors can invest in the funds at any time.
Investors can also withdraw their money upon request, subject to certain restrictions. Blackstone is also luring investors with the promise of providing access to significantly big deals.
There is no shortage of those at the moment. A wave of U.S. initial public offerings has brought investors record proceeds of more than $582 billion through last September; globally, corporate mergers and acquisitions alone recorded volumes of around $2.5 trillion through the end of May 2021. Both IPO sales and M&A deals involve private market firms in a big way.
Super rich
Founder Stephen Schwarzman has close to nearly $20 billion dollars in personal wealth and is one of the world’s richest people. Now his company wants to profit from the upswing in sales that private market investments enjoy among super-rich bank clients.
In Zurich, the team will gain «several» additional positions, according to Solotar. The Swiss team will look after products, marketing and information activities as well as Blackstone's investor services.
