Asia is going to be a strong part of the Blackstone Group’s future. The private equity investment firm purchasing Crown Resorts has big plans for expansion in the region.
Asia is the new land of opportunity. The casino industry already has its eye on the region, with companies such as Las Vegas Sands, Wynn Resorts and others exploring options there. The Blackstone Group, which has its hands in a number of industries, including gaming, is on the same page.
Blackstone’s interest isn’t solely related to the potential for gaming success in the region. However, in a recent interview with Nikkei Asia, it detailed some of what it has in mind. The company’s dedication to the region is a further example of the role Asia will play in the future.
Asia Becomes a Hot Commodity
Jonathan Gray, Blackstone’s president and chief operating officer, has seen the future, and it includes Asia. He’s so confident, despite known risks out of China and elsewhere, that he’s willing to hedge big money.
The firm isn’t going to concentrate all of its assets on the gaming industry, although it will likely be a part of it. Instead, technology, logistics and real estate will also be targets. All three of these, however, are intrinsically linked to gaming, as well.
Blackstone, which wants to have $1 trillion in assets under management by 2026, already has a strong foothold in Asia. It owns a large, 242-acre tract in Guangzhou, China, which sits next to Macau. The company also owns more than “$10 billion of real estate in Japan,” according to Gray, and wants to do more in the country. It won’t be too much longer before Japan begins to realize its integrated resort dreams.
Gray added that the company is focusing heavily on real estate and “logistics warehouses,” which has been a successful business strategy. As a result of its success in Asia, Blackstone raised $6.4 billion to fill a new fund that will target expansion there. That, combined with its existing global fund, gives it $11 billion in “buying power” in the region.
Despite the positive results and the strong markers for growth, Gray recognizes that there is a need to approach Asia with a certain amount of trepidation. China may be growing to become one of the largest markets, but it also faces issues that could cause an implosion.
China is facing problems in its housing and capital markets that are cause for concern. Specifically, real estate developers now have virtually no access to lending channels following an overzealous development plan that led to a real estate glut. The scandal surrounding Evergrande, once a “too-big-to-fail” developer, and its financial troubles highlighted the issues.
Lukewarm relations between China and the US don’t help. However, there are plenty of options outside of China to consider. Blackstone has found ways to tap into them, as well as “sustainability-related” operations that can withstand most consumer market variations.
Among these are transportation and logistics facilities. They’re both always in need and become inherent components of an economic infrastructure. They’re also important components of any gaming ecosystem in any region.
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