Blackstone’s Schwarzman on India optimism, coronavirus impact and Fed’s rate cut
Stephen Schwarzman

Blackstone Group Inc. is positive about India’s long-term growth story despite the recent economic slowdown and the ongoing global health crisis due to the coronavirus outbreak, co-founder Stephen Schwarzman said.

Schwarzman told reporters in Mumbai on Wednesday that even though growth in India has slowed, inflation has accelerated and business confidence is low, Blackstone is optimistic because the economy will continue to expand.

“India has remarkable assets including its people with the education system improving rapidly… These are preconditions for continued expansion… If you select the right things, you can have a very good outcome in India,” he said. Schwarzman is in India partly to promote his book What it takes: Lessons in the pursuit of Excellence.

India has delivered ‘the strongest results’ among Blackstone investments globally, he said. 

Blackstone has invested more than $15 billion in India since 2006, with around $6 billion coming in only in the last 18 months, said Amit Dixit, Blackstone’s India head. These include investments in bankrupt Dewan Housing Finance Corp’s arm Aadhar Housing Finance, Aakash Education, Future Lifestyle and One BKC office building in Mumbai. 

Schwarzman didn’t underplay the adverse impact the coronavirus outbreak would have on global growth. He said some countries may go into recession because of this and some industries will be “dramatically disrupted”.

The virus has infected more than 90,000 people across the world and claimed the lives of over 3,000 people, mostly in China. India has recorded 28 cases of infections so far.

“It is difficult to assess how long this will go on… it is pretty much an unknown, economically,” he said. 

But the issue could recede significantly once the vaccine was in place in about 12 to 18 months, he said. 

While there may be a decline in investment value, there would be opportunities for firms like Blackstone as “the system is going to be disrupted and a lot of people who will need capital are not going to get it,” he said.    

Schwarzman didn’t think the US Federal Reserve’s rate cut on Tuesday to stimulate growth would make a difference as it would not solve for the disruption caused to the global supply chain.

“I don’t see how it can cure coronavirus,” he said, adding that the capital markets were indifferent to the rate cut.

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