Blackstone Inc. President Jon Gray said people underestimate the firm’s $310 billion wealth franchise amid retail investors’ concerns over private credit and other alternative assets.
“We had a strong first quarter,” Gray said Tuesday at the Morgan Stanley US Financials Conference. “We then had the war and all the noise on private credit, which was obviously very loud.”
That $1.8 trillion private credit market faced a reckoning in recent months as retail investors have sought to withdraw their cash from retail products, including business development companies, a private credit product geared for individuals known as BDCs. Many asset managers began limiting withdrawals, including Blackstone.
Read More: Blackstone’s BCRED Caps Redemptions After Investors Seek 10%
On Tuesday, Gray said that institutional investors, which include pensions, endowments, and sovereign wealth funds, have been pleased with Blackstone’s performance. While he said the firm has had lower flows in credit “given the noise,” its private equity product recently reported its best-ever inflows.
“There’s an underestimation of the power of this wealth franchise we’re building,” said Gray, 56. “The breadth of it across real estate and private equity, credit, infrastructure, the return premium it’s generated for customers and the way these structures have worked well.”
Blackstone has prior experience with less-sticky retail investors through its Blackstone Real Estate Income Trust, which was forced to curb withdrawals repeatedly starting about four years ago as higher interest rates made clients want to get out of real estate. In February, BREIT recorded net inflows for the first time since 2022.
“There’s a lot of focus on what’s happening in one particular product at one particular moment,” Gray said.
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Blackstone has more products in the pipeline geared for individual investors. In addition to a hedge fund product , the firm will also create what Gray called “Blackstone in a box,” products that will have multiple Blackstone vehicles. It will also expand into new geographies, Gray said.
“There’s a lot of white space here,” he said.