Blackstone’s new $4 billion fund gives India top billing

MUMBAI: India lies at the heart of the world’s largest private equity firm’s investment strategy. Blackstone Group Lp will invest about 60% of its maiden $4 billion Asia-focused fund in Asia’s third largest economy, two people directly involved with the matter said.

“Blackstone plans to deploy about $4 billion in Asia over the next five years,” said one of the two people, requesting anonymity. Blackstone’s global private equity fund will contribute around 40% of the deal value for every transaction the firm does in Asia, while the new Asia fund— BCP Asia—will invest the remaining 60%, he added.

Rival private equity funds have already been investing in India through their dedicated Asia-focused funds as investment opportunities in the country have multiplied over the past few years. Blackstone’s latest move will help the buyout firm swiftly capitalise on such opportunities.

“Until recently, the focus of private equity interest in Asia was overwhelmingly tilted towards China given the scale of the opportunity and relative ease of exits,” said Anuj Kapoor, managing director and head of investment banking at UBS India. How- ever, the allocation of limited partners (investors in PE funds) towards India has been growing given the growth momentum, favourable demographics, currency stability and structural reforms, he added.

Blackstone, which manages $430 billion of assets globally, has invested about $7.5 billion in India till date. “India is considered to be the best investment

destination in Asia. In the last couple of years, Blackstone has made successful exits with 2-4 times return on Indian investments,” said the first person cited earlier. “Besides India, the fund will look at investment opportunities in China, Australia, Japan and South Korea.”

A spokesperson for Blackstone declined to comment on the fund-raising plans.