China Investment sells equity stake
The Blackstone Group (BX) has announced that China Investment Corporation has sold an equity stake in the company. An investment made 11 years ago thus comes to an end. When this investment was made, 9.9% was owned by the Chinese wealth fund. A possible factor that prompted China to make this move could be President Trump’s decision to levy tariffs on Chinese imports.
China Investment claims that this stake sale was initiated as a result of market changes since it has sold it gradually and not all at once. The wealth fund generated favorable returns with the help of this investment.
Ending on a good note?
China Investment will be working with Blackstone in hedge funds, direct investments, and real estate. However, this cooperation may not last for long and has been made for the medium term. At the end of 2017, the wealth fund owned only 4.5% in the private equity firm.
Blackstone has a return on invested capital of 13.1% on an LTM (last-12-month) basis. Its peers Carlyle Group (CG), CBRE Group (CBG), and KKR & Co. (KKR) have returns of 11.3%, 13.4%, and 2.3%, respectively, on an LTM basis.
In the next part of this series, we’ll look at Blackstone’s recent hires in its insurance space.