A visit by a United States president to a country usually leads to bigger deals on the sidelines. In one of the most interesting developments, private equity major Blackstone Group has tied up with Saudi Arabia's Public Investment Fund (PIF) to create a $40 billion infrastructure fund that will invest in various infrastructure projects in the United States.
Blackstone finally enters the fray
Unlike other well-known private equity groups like BlackRock or Macquarie, who are now big players in the infrastructure investment space; Blackstone had not entered the fray in spite of being a giant of the private equity industry.
However, the prospect of massive infrastructural spending in the United States, in the years to come, has finally seen Blackstone throw its hat in the ring.
Blackstone co-founder, Stephen Schwarzman, who also happens to be Donald Trump's business council head, stated that the fund opens up a lot of opportunities for the assets already held by the group. The United States is all set to go on a massive infrastructure building spree that would open up a lot of investment opportunities for private equity players with the required capital and the expertise.
Infrastructure investments could balloon to the tune of trillions in the years to come with the United States looking for investments in traditional infrastructural spaces like road construction, housing, and oil pipelines among others.
In such a situation it is indeed the right time for a behemoth like Blackstone to enter the fray.
Saudi vote of confidence
Saudi Arabia's PIF will contribute $20 billion to the fund initially while Blackstone will raise the rest. According to some reports, the fund could eventually finance investments worth $100 billion.
PIF's managing director Yasir Al Rumayyan spoke about the Saudi investment on the sidelines and underlined that it is an indication of how highly the Gulf state rates the economic plans of the current US President Donald Trump.
The President had promised huge investments in infrastructure in the lead-up to the presidential election, and it seems that his promises are going to bear fruit in the years to come.
Additionally, such investments in infrastructure would not only lead to a high return on investment for private equity players like Blackstone or PIF but will also result in the creation of thousands of jobs in the United States.
