Blackstone’s Steve Schwarzman sees ‘much fewer things’ to buy because assets are so expensive

FAN Editor

Steve Schwarzman, billionaire co-founder of private equity powerhouse Blackstone, told CNBC on Tuesday he sees fewer buying opportunities because markets and assets have become so expensive.

“All markets have gone up pretty dramatically,” the Blackstone chairman and CEO said on “Squawk Box” from the World Economic Forum in Davos, Switzerland.

Schwarzman said the moves were partly justified by expectations for further economic growth as interest rates remain low. But that’s led to higher purchase prices of assets.

“Everything is up. You have to see something reasonably remarkable in terms of your ability to improve the operations of a company,” he said.

Blackstone, with $554 billion in assets under management, was on a tear last year. In late 2019, it acquired U.S. industrial warehouse properties from Singapore-based logistics provider GLP for $18.7 billion, acquired shares of TallGrass Energy for roughly $3 billion, and took over the real estate assets of the Bellagio casino from MGM Resorts International for $4.25 billion.

However, Schwarzman said, finding value in 2020 may be more difficult.

“I wouldn’t say stepping back,” he said. “This is like a hockey game where you used to have 35 shots on goal, of things you could buy. Now, it’s like five.”

“You have much fewer things that are worth your time to analyze, but that doesn’t mean those things won’t happen,” he added. “But your opportunity set is significantly reduced.”

Schwarzman, who led the now-disbanded Strategic and Policy Forum, which was a group of CEOs who advised President Donald Trump, also said the “phase one” trade agreement between the U.S. and China is an “important deal.”

“When these two don’t have it right, it’s a big deal,” Schwarzman said. “I think it’s in China’s interest as well as in the U.S.’s to do a phase two deal.”

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