Verdun Perry, Blackstone’s global head of strategic partners, sees the secondary market surpassing $100 billion in 2021 and says returning employees to offices is “great for the economy,” he says in an interview with Bloomberg.
Sources have told us that Blackstone is in talks for more than 15 billion dollars in new funds tied to secondaries. “Investors are looking at this market where we provide liquidity to an otherwise long term illiquid asset class and this market has grown significantly. Twenty years ago this market was roughly one point five billion of volume annually. This year we expect the market to surpass 100 billion for the very first time. And so when you think about what this market really does it provides a service to investors that want to get out of a long term asset class.” Verdun Perry, the Blackstone global head of strategic partners , stated about the secondaries market.
Considering if the market has neared the top, Perry explains: “Without a doubt valuations are relatively high but I would tell you for the highest quality companies with secular tailwinds I would argue that these valuations are appropriate. In fact those companies will grow further into those those valuations. But I think that speaks to an illuminates part of the value of being a secondary buyer as it as a secondary buyer. We typically buy funds that are six to 10 years old 90 percent funded. And so if you think where to top where you don’t think we’re at a top what I would tell you is six to 10 years from now which is when we’ll be buying funds that have exposure to these investments. Sixteen years from now we’ll have a good view and we’ll be able to buy assets that can provide good risk adjusted returns.”
When asked about what Blackstone worries about the most in its widely spread portfolio, Perry said: “We have a good view of everything in terms of what to worry about. We don’t focus too much on things that we should be worried about. We focus on high quality assets that have staying power.”
The Blackstone global head of strategic partners elaborate his view on the PE firm’s real estate positions: “In the real estate space clearly retail is facing some headwinds as e-commerce you know and the move to e-commerce takes over. That was really expedited by Covid. So people are buying more things online. But I would say generally we don’t focus on things that you know that are out there that we can’t control. We focus on what we can control and that is buying assets and getting exposure to funds that have high quality assets with stable strong balance sheets that have staying power. That means when Covid happens, or the global financial crisis happens, or 9/11 happens they make it through that.”
Lastly, Perry predicts how he sees the return to offices impact their real estate investments. “It’s great being back in the office. Blackstone is back in the office and I’ve got to tell you we are better together. So I’ve got to believe in many companies it’s the same thing. And so people getting back to work in a safe healthy manner where they feel comfortable getting back to work. I think it’s great for the economy. I think it’s great for our underlying companies. And frankly it’s great for the funds we have exposure to.”
Source: Bloomberg
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