Blackstone President Jonathan Gray Talks AI Infra, EU & US Debt Woes

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Blackstone's president and COO, Jonathan Gray, has also been speaking at the Forum and discussed deploying more capital in India. Let's get more from him. Bloomberg's Yvonne Man has him in New Delhi.

Yvonne Man (0:20)

Hi there, Guy, thanks so much for having us. And yeah, as we try to host, you know, two events, two different venues in one city, it's certainly going to be quite interesting to see. So I want to thank Jonathan Gray, who's over at the other location right now, Blackstone president, CEO, who's joining us. He was in that room when Narendra Modi did speak just a few moments ago.

And Jonathan, it's great to have you here in the region and in New Delhi. I wanted to get your take first of how it felt like in that room during that speech. Was there anything from the prime minister that really resonated with you?

Jonathan Gray (0:51)

Well, Yvonne, it was a, I think a terrific speech. It was very optimistic. It was about growth in the future. And he had this message about to use power to empower, which I think in this world today, particularly as we're grappling with this new technology is an important message. I think this AI can be used as a force for good, particularly when it comes to things like healthcare, lifting up education for people all around the world. So that message for me from the Prime Minister really resonated.

Yvonne Man (1:28)

Obviously, Blackstone has been investing in India for two decades now. Jonathan, you yourself have talked about being, the opportunities, India being the one that has delivered very good returns for Blackstone. But coming at a time when we see a very different picture across public markets, right? When equity markets continue to struggle, of course, we just saw the historic defense of the rupee from the central bank. Biggest moves we've seen since the 2013 taper tantrum.

How do you square the disconnect, it seems, that we're seeing across private and public markets now in India?

Jonathan Gray (2:02)

Well, there are a couple of different sort of cross currents going on here. Obviously, energy prices being elevated have hurt the Indian economy, have hurt the currency.

You also had some concerns around the AI impact on IT services companies here in India. And I would say India coming off sort of 18 months ago, two years ago, had very strong valuations, very high multiples. So there, there's been a bit of a reset. But as investors, we take a long term approach, and we look at an economy that is growing 7 plus percent a year, has a very young population, a rising middle class, a government that's pro-growth. And we see a place that has a lot of opportunity. And so I think as investors, these are the moments where it's more attractive to enter. You know, people tend to like to follow the crowd. For us, we take a slow and steady approach. We find great businesses in the right sectors, invest in them, and here in India, try to build those companies. So I think when you look at the prospects of this country over time, even if there are near-term headwinds, they remained incredibly bright.

Yvonne Man (3:18)

And Blackstone itself has talked about doubling your AUM in India to over $100 billion, I believe, in the next few years. I mean, your portfolio now is really kind of evenly split between real estate and private equity. How do you see this mix evolving as you double your AUM here?

Jonathan Gray (3:38)

Yeah.

Look, we try to identify themes, neighborhoods we really like, places like AI, infrastructure, data centers, NeoCloud, the rising middle class, which I've talked about, where you see things like health care and education, financial services, travel, those are areas we like. And you can express those through companies. We own a stake in one of the largest hospital chains here.

We also own one of the biggest mall companies here as well. We've taken 14 companies public over time. There's a lot of liquidity on the backside when we invest in businesses in India. But again, it's in themes we like, infrastructure, energy, given the enormous needs around both AI, as well as what's happening in the underlying country and its growth. So it's this long-term approach that we take. Try to identify sectors we like, and then express it in real estate, in private equity, in infrastructure. That's been a good formula for us.

Yvonne Man (4:44)

And Jonathan, I mean, you guys are one of the more active investors when it comes to this whole AI infrastructure build out globally now. I'm just wondering, just given the warnings that we've been seeing from the likes of Hawk Tan from Broadcom about AI investors and that the rising cost of capital could be the key constraint in this AI build out. Do you share those concerns in any way? And do you worry that private capital are chasing the same sort of assets and compressing your return?