Bloomberg News

Blackstone Keeps ‘Open Mind’ on Kremlin Fund, Schwarzman Says

June 17, 2011

June 17 (Bloomberg) -- Blackstone Group LP, the world’s largest private-equity firm, may co-invest in a new fund being set up by Russian President Dmitry Medvedev, chairman and chief executive Stephen Schwarzman said.

“I think we have an open mind in terms of looking at that vehicle,” Schwarzman said in an interview at the St. Petersburg International Economic Forum today. Blackstone has yet to invest in Russia.

Medvedev is promoting the fund as a way to spur foreign investment into Russia, diversifying the economy away from a reliance on revenue from oil, gas and metal exports. Representatives from Blackstone, Goldman Sachs Group Inc., Abu Dhabi Investment Authority, and others from the U.S., Europe, Asia and the Middle East, came to Russia to discuss the fund in May.

“In this type of market, a good local partner is essential,” Schwarzman said. He declined to say whether Blackstone is talking to Russian companies. Private-equity rival TPG Capital has invested with VTB Capital, the investment- banking arm of Russia’s second-biggest lender, in a local supermarket chain.

It is “more logical” for companies to invest in the consumer sector because risks associated with commodities industries are “relatively high,” he said.

Should Blackstone decide to invest in Russia, Schwarzman said the allocation would come from an existing fund rather than a new country fund.

Blackstone won’t participate in a share sale by OAO Sberbank, Russia’s biggest lender, later this year, he said. “We don’t do those sort of deals.”

--With assistance from Alex Nicholson in Moscow. Editors: Alex Nicholson, Brad Cook

To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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