“I want to do more,” said Jonathan Gray, President and Chief Operating Officer of Blackstone Inc, which is planning fresh private equity investments of $17 billion in India.

Gray was talking to the media in Mumbai about Blackstone’s investments and exposure in India, which geographically has given the highest returns in private equity for the asset manager over the last 19 years.

The New York-based asset manager sees an opportunity to increase the value of its PE assets by $25 billion over time including the new investments and $7.5 billion on value creation across its current portfolio companies.

AUM of $50 billion

Blackstone has assets under management of over $50 billion in India — $30 billion in real estate assets and $20 billion of PE investments in a range of sectors including healthcare, software, and support services such as VFS Global. Its real estate portfolio includes offices, logistics, warehouses and data centres.

“India has really been a leader for us in terms of performance. In fact, in private equity, our highest return geographically has been in India. We’ve done incredibly well in real estate also,” Gray said. It will be roughly investing $2 billion in India annually.

“Now what I do think is changing is, India is clearly becoming a place more investors are enthusiastic about. India has become a place where more and more global investors are focussed. And it’s a whole combination of factors. But it feels to me like the momentum is building and not slowing,” Gray said, expressing the wish they had done more in India.

New opportunities

The global asset manager, which has around $200 billion in dry powder, is looking for new areas to deploy capital and India is its third largest market after the US and the UK in terms of investments.

Infrastructure is an area where the firm is looking to invest in a bigger way in India. It has digital infrastructure assets in logistics and warehouses, but it is looking at a larger play here on the scale that it has in the US and Europe.

Growth equity investment is another area where it aspires to add more companies to its portfolio, with India seeing a proliferation of entrepreneurs especially from non-metros. Blackstone made its first growth equity investment in Asia in Indian express logistics company Xpressbees in 2022.

With the thrust on ‘Make in India’, companies will need capital, and this presents an opportunity for Blackstone, as there are firms that cannot access bank credit. “And, then, I think over time, if we could raise credit funds, probably rupee denominated, because it’s hard to do credit given the currency translation with foreign currency. I think that’s an opportunity because as this country grows, there will be a need for more credit. I think there are opportunities at the firm level.”

Active role

Gray stressed that in India, the firm followed a differentiated strategy in that it was not a passive investor but took an active management role in the companies in which it had invested. “Building businesses that build India is the core theme at Blackstone,” he said.

“We are very growth oriented with companies and active in the management of these businesses. Part of building of these companies is to build their governance and capital market capabilities and to bring them to the public as long-term, enduring institutions.”

He said they were appreciative of the government’s role, especially in terms of some of the reforms made to the capital market system.