Blackstone’s Gray Says Investing Environment Is Very Challenging

(Bloomberg) -- The investing environment is “very challenging” due in part to high valuations and relatively low global economic growth, according to Blackstone Group Inc. President Jonathan Gray.

Low growth is likely to persist as will current price levels, Gray said at a meeting Wednesday of the New Jersey State Investment Council in Trenton. The organization manages the state’s $78 billion pension fund.

The U.K. shows potential because while Brexit has slowed growth, the market there has underperformed, he said. In emerging markets, India presents opportunities and Blackstone has been the biggest buyer of office buildings there, he said.

Among some of his other remarks:

• Gray said the firm sees investment potential in leveraged loans, logistics assets, online payment systems and life sciences
• Distressed credit, long duration fixed income are challenging
• Blackstone is looking at promoting diversity on the boards of companies it acquires, he said, without giving more details

Close to 10% of New Jersey’s pension fund assets are spread across some two dozen Blackstone funds, representing nearly $8 billion, state data show. Most of the pension’s current allocations to Blackstone were made between 2012 and 2015, and through August they cumulatively returned about 38%, according to a 2019 Bloomberg News analysis.

The New Jersey fund is among the world’s largest, enabling it to command an audience with some of the finance industry’s biggest names. In recent years speakers such as TPG Co-Founder James Coulter, BlackRock Chief Executive Officer Larry Fink, and former Treasury Secretary Timothy Geithner have shared their views on markets and the economy with the organization.

To contact the reporter on this story: Shahien Nasiripour in New York at snasiripour1@bloomberg.net

To contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, Alan Mirabella

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