China’s State Investment Company to acquire non-voting minority stake in Blackstone

The purchase price per common unit will be 95.5 per cent of the public offering price in Blackstone’s planned initial public offering. The number of non-voting common units purchased by the Chinese state organisation will be reduced if necessary so that its equity interest in Blackstone immediately following the planned IPO remains under 10 per cent. The State Investment Company has agreed to hold its investment in Blackstone for at least four years.
 
Lou Jiwei, head of the working group of the State Investment Company, says: ‘We are very pleased to be able to make the State Investment Company’s very first investment in such a well-respected firm as Blackstone.’
 
Blackstone chairman, chief executive officer and co-founder Stephen A. Schwarzman says: ‘We are pleased to welcome the State Investment Company as an equity owner of our firm.’

The USD3bn sale of non-voting common units to the State Investment Company will close concurrently with Blackstone’s planned USD4bn IPO.
 
The Chinese government is establishing an investment vehicle to manage the country’s foreign exchange reserves, estimated at around USD1trn. The organisation, whose formal name has yet to be decided, will report directly to China’s governing State Council.
 
The Blackstone Group is one of the largest independent alternative asset managers in the world, with businesses including the management of corporate private equity funds, real estate opportunity funds, funds of hedge funds, mezzanine funds, senior debt funds, proprietary hedge funds and closed-ended mutual funds. The firm also provides financial advisory services, including merger and acquisitions advisory, restructuring and reorganisation advisory and fund placement services.