Blackstone (NYSE:BX) plans to expand its private wealth business into at least two new European markets next year to capitalize on increasing demand among affluent individuals, according to two company executives who spoke to Reuters.
The New York-based firm has prioritized attracting investments from wealthy individuals amid volatile market conditions and a shift by private equity firms to diversify their clientele beyond institutional investors.
Currently, Blackstone’s European wealth operations have offices in London, Paris, Zurich, Milan, and Frankfurt, though the company has not disclosed which new markets it plans to enter.
Blackstone’s wealth products have a minimum investment requirement ranging from $10,000 to $25,000.
The firm has increased its private wealth assets globally to approximately $250 billion, up from $103 billion in 2020, representing 23% of Blackstone’s total assets of $1.1 trillion. However, the company did not reveal the value of its wealth assets in Europe.
Navigating Europe’s fragmented market and its various regulatory frameworks has been challenging. According to the executives, France and Italy have been the strongest growth markets for Blackstone’s wealth business, while progress in the UK has been slower.
“This is not the United States of Europe. There’s much more complexity, and I think Blackstone understands that,” stated Rashmi Madan, head of Europe, the Middle East, and Africa (EMEA) for Blackstone’s private wealth solutions group.
Madan noted that recent regulatory changes across Europe, including in the UK, aimed at promoting retail investment in private markets are a “positive sign.” She emphasized a growing recognition in Europe of the importance of long-term investing.
Despite a trend of wealthy individuals relocating since the 2016 Brexit vote, Britain remains a key market for the wealth business, according to Madan. She made these comments ahead of last week’s budget announcement in the UK, which included tax increases for the wealthy. Blackstone chose not to comment on the budget.
To support its business expansion, Blackstone has appointed Sheila Rapple as the chief operating officer for EMEA wealth; she moved to London from New York in October.
“There’s massive opportunity,” Rapple told Reuters, referring to the European market.
**CASHING OUT**
Blackstone is focusing its wealth expansion efforts on a variety of semi-liquid “evergreen” funds aimed at retail investors, which will cover private equity, credit, and real estate. The firm plans to launch two new funds in credit and infrastructure early next year, starting in the U.S.
These products are typically marketed to affluent individuals through partnerships with local banks and wealth managers, including French lender BNP Paribas and Italian insurer Generali.
Investing in private markets can expose retail investors to illiquid and hard-to-value assets.
Blackstone restricted client withdrawals from its flagship $55 billion “BREIT” property fund for more than a year until February, as investors sought to exit amid a global downturn in commercial real estate.
Blackstone’s retail funds generally include a one- or two-year “soft lock” period, allowing investors to withdraw early for a penalty fee, after which they can exit monthly or quarterly, subject to fund-level limits, Madan explained.
This structure sends a clear message to investors, she noted: “This is an illiquid fund, and you’re effectively investing in private markets.”
