See Jonathan Stempel on Blackstone’s IPO. It is hard to say which part of this deal is the most brilliant. Obviously the IPO is very strongly anticipated but selling a $3bn to China’s state investment company helps the process along. The deal also indicates to Blackstone’s rivals that the firm has tapped into a new source of funds to continue the private equity spree. (A condition of the deal is that China is prevented from making a similar investment in Blackstone’s rivals for a year). For China, this gets them into investments in the global stock markets without having to front deals, a process that has been shown to generate significant backlash. It also recognizes that for China the global markets are now the most attractive investment avenue. Currencies are going to offer a lot of risk, and the bond market is looking at interest rate upticks. This message, that the Chinese trade surplus is going into stocks, is good for the market, which is good for IPOs, which is good for Blackstone’s IPO in particular….
