Blackstone increased its pace of investing to a two-year high in the second quarter as the world’s largest alternative asset manager prepared for the US Federal Reserve to begin cutting interest rates. The head of the New York-based private investment group told the Financial Times that there were signs of inflation waning across its portfolio, including in its giant $336bn property business. “The Fed has and will have air cover to cut rates,” said Jonathan Gray, president of Blackstone.
Gray said Blackstone was keen to keep putting money to work in new investments, especially given valuations were no longer stretched as high as they were in 2021 and early 2022. Auctions for businesses are “not nearly as heated” as they were before the Fed kicked off its rate-raising cycle, he added. “Your purchase price is permanent,” he said. “Your borrowing cost is temporary. While the borrowing cost is higher, you are better deploying capital.