Americans may face persistently higher inflation than they’ve been accustomed to because employers have had to pay to bring workers back in front-line industries, Blackstone CEO, Stephen Schwarzman, said at the Qatar Economic forum on Wednesday.
Schwarzman’s remarks echoed others at the three-day event, including former Treasury Secretary Lawrence Summers and billionaire investor Ray Dalio, who warned inflation could threaten the U.S. economic recovery.
The Qatar Ministry of Commerce and Industry, Investment Promotion Agency Qatar and Media City Qatar are underwriters of the Qatar Economic Forum, Powered by Bloomberg.
Blackstone’s Schwarzman said the risk of an increase in U.S. capital gains taxes has led to explosive growth in potential targets for his alternative investment firm, as corporate owners look to cash in ahead of any legislative changes.
“It’s really like an avalanche now of opportunities — people want to sell things before their taxes are much higher for selling the same thing, potentially next year,” Schwarzman said in an interview at the Forum. “It’s giving us a lot of opportunities, and what we have to do is be careful, always have a very exciting plan for growth.”
It’s not just taxes: Higher corporate valuations are also a strong motivator for people to sell their businesses, Schwarzman said. “The U.S. economy is really on fire, almost everything is growing much faster than almost anyone anticipated.”
On wages, Schwarzman said stimulus programs have discouraged some from returning to work, meaning some inflation is likely to be “baked in at higher levels” than in the past decade.
Extreme swings in Bitcoin and other tokens are hampering their appeal for institutional investors like Qatar Investment Authority. QIA is one of the world’s largest sovereign wealth funds, with assets estimated at over $360 billion by Global SWF.
Cryptocurrencies “need a bit of maturity before we make our view about investing in that space,” QIA Chief Executive Officer Mansoor Bin Ebrahim Al Mahmoud said.
Bitcoin has lost more than 50% from its mid-April high of almost $65,000. The coin started 2021 trading around $29,000 following a fourfold increase in 2020. It bounced back on Wednesday after earlier whipsawing investors with a dip below $30,000.
Search traffic shows strong pent-up demand from Chinese consumers to travel overseas, according to Trip.com Group Ltd Chief Executive Officer Jane Sun. She said domestic travel in China is rebounding well, with hotel and airline bookings during past holiday seasons growing as much as 70% compared with the same period in 2019.
On the same panel, Marriott International Inc. Chief Executive Officer Tony Capuano said he expects a new type of traveler to boost hotel performance in the early days of the travel recovery -– guests who combine business trips with family vacations.
Such guests add days to their stays, creating a new source of bookings for a global hospitality sector that was leveled by the Covid-19 pandemic. “We think that blending of trip purposes is great for the hotel industry,” Capuano said.
Also on the panel, Portugal’s Secretary of State for Tourism Rita Marques said she expects the country’s tourism industry to grow this year by at least 20% compared to 2020.
The pandemic has created a once-in-a-generation buying opportunity for investors willing to bet on the long-term prospects of workers returning to the hearts of global cities, Tishman’s Rob Speyer and Brookfield Asset Management’s Bruce Flatt said.
“There are extraordinary opportunistic things to buy in major cities around the world,” Speyer said during a panel at the Qatar Economic Forum Wednesday. “We have been active during Covid in Paris, in Washington D.C., in San Francisco, in London and people are just selling off real estate at 25%, 30%, 40% discounts.”
Even as others fret about the future demand for workspace, Tishman has spent about $12 billion since March last year on deals it expects “to be some of the best investments we have ever made,” Speyer said. “If you have a long-term view of things reverting anywhere near where they were pre-Covid, these are generational buying opportunities.”
Most buyers of a sustainable development in the world’s most expensive property market were under 40, New World Development Co. Chief Executive Officer Adrian Cheng said.
Millenial buyers of The Pavilia Farm property in Hong Kong were attracted by the “unique urban farming concept,” Cheng said. The residential project was oversubscribed by more than 33 times in the first week of sales, underscoring pent-up demand for housing in the city.
“Sustainability is like a second nature to young generations, also a major factor driving New World’s core businesses, from residential to commercial projects,” Cheng said.
Tom Barrack said he sees a mismatch between the pace of technological change and the real estate industry’s ability to catch up. Talking shop, he discussed some of his firm’s investment in digital assets like data centers and radio towers.
Barrack is the founder of Colony Capital, which earlier this month said it would rebrand as DigitalBridge.
Barry Sternlicht said special purpose acquisition companies need more oversight from the U.S. Securities and Exchange Commission, and pointed at Clover Health Investments Corp. as a sign of a bubble.
“The stock market is detached from reality,” he said at the Forum. “Clover Health Care is basically a fraud, is trading at $16 a share, and it keeps going up. The more you say it is going out of business, the higher the stock goes.”
A Clover representative declined to comment on Sternlicht’s remarks. Sternlicht has been involved in at least five SPAC deals since the beginning of last year, and said that he hoped the trend had peaked.
“There is a trickle of deals getting done,” the 60-year-old founder of Starwood Capital said. “I hope it remains a trickle. I doubt it will remain a trickle until the SEC tightens the process up,” he said, adding that SPACs are “really misleading investors.”
Source: Swiss Info
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