Blackstone’s Jonathan Gray says the private equity giant likes the travel, sustainability, and housing sectors amid the economic reopening

Jonathan Gray
Jonathan Gray, Blackstone President and Chief Operating Officer, at the CNBC Institutional Investor Delivering Alpha conference July 18th in NYC.

  • Blackstone President Jonathan Gray says he likes the travel, sustainability, and housing sectors as the economy restarts.
  • Blackstone has focused on “thematic investing” in recent quarters and found great success.
  • The private equity firm beat analyst estimates for earnings and segment revenue in Q1 while AUM reached $649 billion.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

In an interview with Bloomberg’s Sonali Basak on Thursday, Blackstone’s President and Chief Operating Officer Jonathan Gray said his firm invested in the travel, sustainability, and housing sectors amid the economic reopening and is “excited” about the sectors’ potential moving forward.

Gray added that Blackstone has moved toward “thematic investing” during the pandemic due to the transformation of the US economy by technology and said the firm plans to continue the strategy in 2021.

“In an environment that’s being transformed by technology, how can you see the best neighborhoods, the areas that will benefit from what’s happening,” Gray said. “We’ve done a lot in technology and life sciences, global logistics, we had huge appreciation in the quarter in our portfolio and a lot of that was in those areas.”

Gray said Blackstone’s top themes for 2021 are travel, sustainability, and housing due to the COVID recovery.

“Looking forward, and certainly in the first quarter, we’ve been doing a lot around the COVID recovery play, so we’ve invested in a bunch of travel-related businesses…that’s an area we’re excited about,” Gray said.

Gray also said Blackstone is “excited about what’s happening in sustainability” and that the firm did a number of deals in Europe and the US to build out the electrical grid and help with environmental remediation.

Finally, Gray said he’d “add housing as another area where we have a bunch of enthusiasm” and that his firm has done deals in the US both in rentals and in single-family housing in the first quarter.

According to Bloomberg, Blackstone invested $17.7 billion in the travel, sustainability, and housing sectors in the first three months of 2021, buying hotels like Extended Stay America, private jet operator Signature Aviation, and a UK-based travel company called Bourne Leisure.

Gray was also asked about his views on inflation.

“I think that really is the big question, that’s the concern that exists and you see it in steel and lumber prices which are up double digits. Used cars are up 25% year-over-year. We’re beginning to see pressure on wages…and so I think that’s something that all investors need to take into account. I think there’s some risk on valuation multiples,” Gray said.

Gray’s comments come after Blackstone posted strong earnings results on Thursday.

Assets under management grew to $649 billion and private equity distributable earnings jumped 160%. Real estate distributable earnings also doubled to $540.8 million.

This pushed total first-quarter distributable EPS to $0.96, which beat analyst estimates for $0.76 and topped the $0.46 figure the company turned in the first quarter of 2020.

Shares of Blackstone traded up over 4% on Thursday after earnings were released.

Read the original article on Business Insider

150 business leaders, including Google’s Sundar Pichai and longtime Trump ally Stephen Schwarzman, are backing Biden’s $1.9 trillion stimulus bill in a letter to Congress

Blackstone CEO Stephen Schwarzman, President Joe Biden, Google CEO Sundar Pichai
Blackstone CEO Stephen Schwarzman, President Joe Biden, and Google CEO Sundar Pichai.

  • More than 150 execs at big US firms have said they support Joe Biden’s relief package.
  • Blackstone CEO Stephen Schwarzman and Google CEO Sundar Pichai were among those who signed a letter to lawmakers.
  • “Congress should act swiftly and on a bipartisan basis to authorize a stimulus and relief package,” the execs wrote.
  • Visit the Business section of Insider for more stories.

More than 150 executives from top US companies spanning a range of industries including finance, tech, and real estate have backed President Joe Biden’s $1.9 trillion coronavirus relief package in a letter sent to Congress Wednesday.

They include Blackstone CEO Stephen Schwarzman, who was a longtime ally of President Donald Trump; Google CEO Sundar Pichai; and Goldman Sachs CEO David Solomon.

The letter, written by the Partnership for New York City, was addressed to Charles Ellis Schumer, the Senate majority leader; Nancy Pelosi, the speaker of the House; Mitch McConnell, the Senate minority leader; and Kevin McCarthy, the House minority leader.

The letter calls for lawmakers to approve the relief package. The executives said they “urge immediate and large-scale federal legislation to address the health and economic crises brought on by the COVID-19 pandemic.”

CNN first reported on the news.

Biden’s $1.9 trillion COVID-19 relief plan, the American Rescue Plan, includes proposals for additional $1,400 stimulus checks, bigger federal unemployment benefits, and expanded family and child benefits, as well as plans to tackle the pandemic through testing, vaccines, and support for reopening schools safely.

“Previous federal relief measures have been essential, but more must be done to put the country on a trajectory for a strong, durable recovery,” the executives wrote.

“Congress should act swiftly and on a bipartisan basis to authorize a stimulus and relief package along the lines of the Biden-Harris administration’s proposed American Rescue Plan.”

John Zimmer, the cofounder and president of Lyft; Brian Roberts, the chairman and CEO of Comcast; Larry Fink, the chairman and CEO of BlackRock; and John Stankey, the CEO of AT&T, also signed the letter.

Executives from the following companies are among those that signed the letter:

  • Banking and investment: Goldman Sachs, BlackRock, Morgan Stanley, Visa, S&P Global, MasterCard, and Blackstone
  • Technology: Google, Intel, IBM, Siemens, Zoom, DoorDash, and Lyft
  • Hospitality and retail: Loews Hotels & Co, LVMH, Etsy, and Saks Fifth Avenue
  • Airlines: American Airlines, United Airlines, and JetBlue Airways
  • Telecommunications: AT&T and Comcast
  • Real estate, insurance, and utility firms

Schwarzman was a longtime ally of President Donald Trump who defended Trump’s lawsuits challenging his loss in the 2020 US election. In the aftermath of the January 6 Capitol riot, Schwarzman said he was “shocked and horrified” by the insurrection and called for a peaceful transition to Biden.

Biden has previously said the US needs new measures to deal with both the health and economic impacts of the pandemic.

“We can’t let one wait,” he told reporters earlier this month. “We can’t get everybody well and then move on the economy. We have to move quickly on both.”

The executives supported this stance in their letter.

“Strengthening the public health response to coronavirus is the first step toward economic restoration,” the executives wrote, per CNN.

Biden and the White House have been working with business leaders to gather support for his stimulus deal.

On February 10, Biden, Vice President Kamala Harris, and Treasury Secretary Janet Yellen met the CEOs of JPMorgan Chase, Walmart, Gap, Lowe’s, and the Chamber of Commerce to discuss the stimulus deal and the push for a $15 federal minimum wage.

Biden’s administration has also spoken with representatives from the Business Roundtable, Ernst & Young, General Motors, the National Association of Manufacturers, and the Black Economic Alliance, a White House official told CNBC.

The role big businesses play in politics has come under scrutiny in the aftermath of the Capitol siege. Dozens of top US businesses halted donations to Trump and other lawmakers who challenged the election’s integrity.

Read the original article on Business Insider

Blackstone CEO and longtime Trump ally Stephen Schwarzman says he is ‘shocked and horrified’ by the ‘insurrection’ that followed the president’s speech, calls for a peaceful transition

Trump Blackstone
  • Blackstone CEO Stephen Schwarzman slammed the violence in Washington, DC, that followed Trump’s speech on Wednesday, calling it an “insurrection.”
  • “I am shocked and horrified by this mob’s attempt to undermine our constitution,” he said in a statement to Insider.
  • Schwarzman had previously defended Trump’s lawsuits challenging the election results during a phone call in November with dozens of Fortune 500 CEOs.
  • Visit Business Insider’s homepage for more stories.

Blackstone CEO, chairman, and co-founder Stephen Schwarzman on Wednesday denounced Trump supporters’ violent attacks on the US Capitol after following the president’s inciting rhetoric.

“The insurrection that followed the President’s remarks today is appalling and an affront to the democratic values we hold dear as Americans,” Schwarzman said in a statement to Insider.

“I am shocked and horrified by this mob’s attempt to undermine our constitution.  As I said in November, the outcome of the election is very clear and there must be a peaceful transition of power,” he added.

Schwarzman’s criticism is notable given his close ties to Trump and previous defense of his attempts to challenge the US presidential election results.

In late November, Schwarzman admitted that Trump had lost the election. Just weeks earlier, however, when more than 24 CEOs of Fortune 500 firms met to discuss what to do if Trump refused to leave the White House, Schwarzman defended Trump’s baseless election lawsuits, according to the Associated Press.

During the call, Schwarzman challenged the suggestion by other executives that there was a possibility of a coup, repeated at least one of the president’s unsubstantiated voter fraud claims, and expressed skepticism over the Pennsylvania results, according to the AP.

Schwarzman has been a Trump ally and staunch defender as far back as 2016, when he headed up a group of business leaders to “frequently” advise then-President-elect Trump on economic matters.

Read the original article on Business Insider

Investing legend Byron Wien says the S&P 500 will hit 4,500 in 2021-but warns of a 20% correction in the first half of the year

Byron Wien
  • Byron Wien released his 36th annual “Ten Surprises” list on Monday, where he forecasts financial, economic, and political events that he believes will have a better than 50% chance of happening. 
  • The vice chairman of Blackstone Group Inc’s private wealth solutions business  is forecasting the S&P 500 will tumble almost 20% in the first half of 2021 but then climb to 4,500.
  • He also predicts that unemployment will fall to 5%, large-cap technology stocks will lag, and cryptocurrencies will “gain more respect during the year.” 
  • View Business Insider’s homepage for more stories.

Byron Wien is forecasting the S&P 500 will tumble almost 20% in the first half of 2021 but then climb to 4,500, a 21% upside from current levels.

The vice chairman of Blackstone Group Inc’s private wealth solutions business released his 36th annual “Ten Surprises” list on Monday. Joe Zidle, the group’s chief investment strategist, co-authored the list.

Wien defines a “surprise” as an event that the average investor would only assign a one out of three chance of taking place but which he believes will have a better than 50% chance of happening.

On the markets front, Wien predicts that the S&P 500 will correct  almost 20% in the first half of 2021, but rise to 4,500 later in the year. At the start of 2020, he predicted the benchmark index would pass 3,500 at some point.

Read more:A Refinitiv research chief outlines 6 key investing themes that will drive markets in 2021 – and explains how you can capitalize on each within your portfolio

Stocks beyond health care and technology will participate in the rise in prices as the stock market broadens out, he added. Wien sees cyclical stocks leading defensive stocks and small-cap stocks beating large-cap stocks. He added that large cap technology stocks will be laggards for the year.

The investor also predicts the  post-vaccine economy will be strong and momentum will develop on the back of pent-up demand, while stocks in depressed industries like hospitality and airlines will rally. The unemployment rate will fall to 5% and 2021 will mark the beginning of the “longest economic cycle in history, surpassing the cycle that lasted from 2010 to 2020.” 

Wien added that inflation will increase modestly, and as a result, gold will rally and cryptocurrencies will “gain more respect during the year.” 

Read the original article on Business Insider