Leaders League. What is Blackstone’s in-
vestment strategy in terms of allocation to
important countries in Europe. The firm
has presence on the ground in the UK,
France and Germany – is this sufficient
to cover deals across the entire continent?
T.D.L. We have offices in the UK, France
and Germany but most of our deal team is
based in London. We do cover all of Europe
(Western and Eastern Europe) including
Scandinavia from our London office and it
has worked well for us up till now. We have
done deals in the UK, France and Germany
of course, but also in Spain or Italy where we
do not have an office. For the size of deals
we look at, we have not found it necessary
to have a local presence to attract deal flow.
It is obviously helpful to have French people
when you look at a French deal, Germans
for a German deal, etc. We are well covered
in this regard as we have professionals from
most European countries in our deal team
in London.
Leaders League. What are the other diffe-
rentiating factors that give Blackstone a
competitive advantage over its peers?
T.D.L. Mainly, the ability to work across
teams. Blackstone has a diverse global bu-
siness platform which encompasses pri-
vate equity, a tactical opportunities team,
real estate funds, hedge fund solutions,
and credit funds. We also have teams in
the US, Europe, Asia, India, and Australia.
This gives us an edge in terms of having
the ability to look at deals from a different
perspective or in different parts of the ca-
pital structure, as well as allow businesses
we invest in to leverage our global foot-
print and expand into markets they don’t
have access to.
Leaders League. Does the ever-increasing
complexity of regulations have an impact
on the acquisition strategy? How much
does ESG matter for Blackstone?
T.D.L. Both are important. I used to be on
the Board of Center Parcs (the short break
holiday operator) in the UK, and ESG mat-
ters constituted one of the company’s top
priorities given they operate in woodland
locations. And for the firm, ESG is a top
priority.Regulation and tax laws are becoming in-
creasingly important as they affect both the
flexibility and the costs of running a bu-
siness. The increasing complexity of these
factors coupled with changes in regulation
and tax laws require our continual focus on
these matters, whether it is when we struc-
ture a deal or during the course of our in-
vestments.Leaders League. For the United Kingdom
private equity industry in general, and for
Blackstone in particular, would you say
the Brexit brings more challenges or op-
portunities?
T.D.L. In the short term it brings uncertainty
which may impact transaction volumes. In
the medium to long term, when there is
more visibility on the status between the
UK and the EU, investment opportunities
should return. In addition, volatility can ge-
nerate good investment opportunities for the
private equity industry.Leaders League. Blackstone has raised
a Core Fund. The fund is meant to hold
investments for longer than the typical
three to five year period. What are the
reasons for this change in investment
strategy and is this likely to be seen in
upcoming funds?
T.D.L. Firstly, the investment horizon for
our private equity funds is usually five years.
While it is true that it can sometimes be a
little more, it is rarely less than that. With
regards to our core fund, our model is to
invest in lower-risk companies for an
extended period of time.These are sizeable
and resilient businesses, potentially with a
global presence and brand. These type of
deals can generate very attractive risk-ad-
justed returns that justify a longer hold
period.DIVERSIFICATION
BY SECTOR AND
GEOGRAPHY IS
IMPORTANT FOR BOTH
DEAL GENERATION
AS WELL AS FUND
PERFORMANCE