Blackstone sees $30tn private credit opportunity
Blackstone has forecasted the private credit market to swell to $30tn (£22.9tn) thanks to growth in infrastructure finance and increased investment from pension funds.
The sector is currently valued at around $1.7tn, but that is “a sliver of the overall opportunity set,” according to Rob Horn, global head of infrastructure and asset-based credit at the Blackstone Credit and Insurance unit.
“The opportunity set to finance the real economy, whether that’s credit cards, whether that’s equipment, whether that’s data centers, aircraft — that is roughly a $30tn opportunity.”
Read more: Blackstone and Generali to launch French retail private debt fund
Horn said that investors are shifting money out of public markets, where “liquid benchmarks have deteriorated”.
“Not only can we get hard-asset collateral – which differs from what they get in the public market – but we also get a premium return,” he said on the Credit Edge podcast from Bloomberg Intelligence.
Read more: Blackstone’s credit and insurance chairman to retire
He predicted increased allocations from insurance companies, as well as pension and sovereign wealth funds.
“From where it is today – whether it’s 0 per cent of your portfolio or three per cent – there’s certainly room to increase that toward 10 per cent, 20 per cent, depending on what your liability profile is,” he said on the podcast.
Blackstone is planning to invest $100bn in energy transition and renewables, and also sees digital infrastructure and residential real estate as key opportunities for private credit.
Read more: Blackstone boss cites 0.3pc default rate on private credit
