Blackstone Group LP (BX:US), the world’s biggest manager of alternative assets, will seek more investments in Southeast Asia following the opening of an office in Singapore seven years after entering the Asia-Pacific region.
Blackstone, led by Chief Executive Officer Stephen Schwarzman, has more than $5 billion of Asian assets, of which more than half are in real estate. Singapore will be the firm’s second office with treasury functions after New York, according to the company, which manages about $248 billion worldwide.
“When I was here nine months ago we had only a few people in this office and now it’s 35,” Schwarzman said in a speech at the opening event in the island-state yesterday. “At that growth rate we are going to be doing well here in Singapore.”
The office, its eighth in Asia after cities including Hong Kong, Tokyo, Mumbai and Sydney, will give the New York-based firm its first presence in Southeast Asia, where the economy is forecast by the Asian Development Bank to expand 4.9 percent this year and 5.3 percent in 2014. Private-equity deals in Southeast Asia, excluding Myanmar, totaled $9 billion so far this year, compared with $6 billion in 2012, according to data compiled by Bloomberg.
Blackstone’s investments in Asia are made up of $3.05 billion of real estate, including the StarHub business park in Singapore. An additional $2.63 billion is in private equity, according to the company.
Hong Kong is the firm’s largest office in Asia with about 70 people, according to Peter Rose, Blackstone’s senior managing director of public affairs. The firm, which has more than 200 employees in the region, also manages $23 billion on behalf of limited partners in Asia, according to company data.
Blackstone is expanding in Southeast Asia as the regional outlook dims. The Indonesian rupiah’s drop in the past three months led declines among emerging-market currencies amid outflows from developing nations, according to data compiled by Bloomberg.
Singapore’s benchmark Straits Times Index (FSSTI) has gained 0.9 percent this year, the smallest among developed markets, the data showed.
“Up until recently, Southeast Asia really stood out as the main bright spot in the region,” said Gareth Leather, a London-based Asia economist at Capital Economics Ltd. “Despite all that, the economy is still OK. In terms of long-term drivers of growth, the demographics are still favorable.”
Blackstone rose 79 percent this year through yesterday, closing at $27.84, in New York trading (BX:US). The company sold shares to the public at $31 each in 2007.
The main sectors for private-equity deals in Southeast Asia, where most of the region’s 650 million people will be middle class by 2020, will be consumer goods such as food and beverage, consumer finance, health care and industrials, Sebastien Lamy, a partner at Bain & Co., which provides management consulting services to the private-equity industry, said in April.
KKR & Co. (KKR:US), the private-equity firm run by Henry Kravis and George Roberts, opened its first Singapore office a year ago, its seventh in the Asia-Pacific region. The firm’s $359 million investment in Vietnam’s Masan Consumer Corp. was its biggest in the region. KKR also said this month it agreed to buy Weststar Aviation Services Sdn. for 642 million ringgit ($202 million), marking its first investment in Malaysia.
Blackstone said Singapore offers the financial infrastructure it needs. The company moved one of its four real estate partners in Asia to the city-state from Japan, it said.
“One of the attractions of Singapore is that it’s easy to find talent here,” Rose said in an interview in Singapore yesterday.
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