In 2024, Blackstone expects Japan and India to handle the majority of deals in Asia

 In 2024, Blackstone expects Japan and India to handle the majority of deals in Asia

In an interview conducted in Tokyo, Joe Baratta, Global Head of the private equity industry at Blackstone, said that India "has the highest growth; it also has the most euphoric stock market." As a market, Japan will be quite intriguing as well. There seems to be a disconnect between the state of the economy and global events.

In 2024, Blackstone expects Japan and India to handle the majority of deals in Asia.

Based on the allocation of funds, Blackstone Inc. anticipates that its most active Asian markets in 2019 will be Japanese and Indian markets, according to the head of the company's private equity division.

In an interview conducted in Tokyo, Joe Baratta, Global Head of Private Equity that Blackstone, said that India "has the greatest economic growth; it also has the most enthusiastic stock market." As a market, Japan will be quite intriguing as well. There seems to be a disconnect between the state of the economy and global events.

The biggest alternative asset manager in the world has operations in India, where it most recently bought shares in two hospital networks. Despite increased interest from international investors in Japan over the last two years, the island country has had a rather calm period when it comes to private equity acquisitions.

According to Baratta, Blackstone would consider doing investments in Japan for between $300 million and over $2 billion, particularly in the IT, healthcare, and consumer sectors. He continued by saying that it is now processing transactions in the consumer and industrial sectors.

Baratta was in Tokyo to connect with with the executives of Blackstone's private equity firm, who were traveling around Asia. There, they discussed strategy and held meetings with investors from around the world.

The only two private equity portfolio firms in Japan owned by the New York-based company are Ayumi Pharmaceutical Corp. as well as Alinamin Pharmaceutical Co., the latter of which formerly Takeda Pharmaceutical Co.'s consumer healthcare division. In a transaction of 242 billion ($1.6 billion), it purchased the latter. Early this year, negotiations for Blackstone to become an equity participant in the Toshiba Corp. purchase faltered.

The private equity business has faced challenges due to a decline in dealmaking, high interest rates, banks' reluctance to lend, and unstable markets. Blackstone revealed a 12% decrease in quarterly earnings that was distributed to stockholders last month.

Nevertheless, Baratta said that the company's private equity pipeline is stronger today than it has ever been, having been reduced by Blackstone in the middle of 2021 when inflation began to become an issue. In January 2022, the company completed financing a $11 billion buyout fund in Asia.

With regard to historically low interest rates, Japan has been among the industrialized countries with the fewest holdouts. However, this may soon change as the central bank indicated last week that it was loosening its hold on long-term rates. Yet, Baratta said that the firm's investment decisions were unaffected by the Bank of Japan's stance.

"The return we're generating in private equity doesn't include a significant amount of financing costs," he said. "Japan remains fascinating despite recent policy changes by the BOJ that could signal an increase in interest rates."

There is potential appeal for Blackstone in the weakening yen, which has lost more than 20% of its value compared to the US dollar over the last two years due to the difference in interest rates between the US and Japan. It could improve our overall perception of investing in a particular moment, according to Baratta.