Blackstone Pushes Into Asia, Tech to Boost Profit as Rates Rise

(Bloomberg) -- Blackstone Group LP is expanding into Asia and technology to bolster earnings as interest rates rise, said Jon Gray, the firm’s president.

As the economy enters an era of interest rates increasing for the first time in decades, Gray said New York-based Blackstone will need to invest in businesses or geographies with fast-growing earnings, such as life sciences, technology and Asia.

“The reason why you want more exposure to growth is we’re moving out of this environment of rates coming down -- which we’ve been in for 30 years,” Gray said in an interview on Bloomberg Television Monday. “In an environment of rates going up, you’re less likely to see multiple expansion. And so to drive earnings value or drive value growth, you need an increase in earnings."

A challenge for Blackstone is that TPG, KKR & Co. and Carlyle Group LP have a head start in building growth equity businesses. TPG started its growth fund in 2007 to specialize in growth equity and middle-market buyout opportunities.

Blackstone also sees “big opportunities” in insurance and it’s focusing more on raising permanent capital, Gray said.

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