Inside Blackstone’s Strategy in Germany
Blackstone recently announced a new office opening in Frankfurt – a space that marks our continued conviction in Germany, and our plans to build on previous success in the market. We hear from Juergen Pinker (SMD, Private Equity) and Jurij Puth (SMD, Blackstone Credit), our leads on the ground for these respective businesses, about what expanding in this market means for Blackstone.
Jurij and Juergen, you are front and center of our exciting new office and plans for Germany. Tell us more about what’s in store.
Jurij: Thank you and absolutely. Our brand new, 1,300 sqm office is located at the heart of Frankfurt’s financial district, a stone’s throw from the Opera and the Main River. Blackstone Credit has been on the ground here since 2017, but we are excited to expand our presence and look forward to welcoming the whole breadth of Blackstone’s platform to Frankfurt. In fact, plans are already underway to further grow our footprint across Real Estate, Infrastructure and PWS.
Juergen: From a Private Equity perspective, our local presence will be brand new in Frankfurt. We’ve long recognized the importance of the German market – and from experience and involvement in numerous deals here, there is no greater value than having a local market understanding and presence. Establishing solid roots is the next logical step in our long-standing engagement in Germany, bringing us closer to investors and the companies with whom we partner.
Building on that Juergen, for PE, what makes Germany such a compelling place for the firm to strengthen our roots?
Juergen: With more than €17 billion deployed to date, Germany is a huge market for us, and the new office positions us perfectly to build on that. We are big believers in the German economy, having invested in the country for more than 20 years in brands like Leica, Scout24, Armacell, Schenck Process and Gerresheimer, as well as Merlin Entertainments – which operates household names such as Madame Tussauds Berlin and the LEGOLAND Discovery Centre. Our portfolio companies currently support more than 7,000 jobs in Germany.1
Further, Germany is an attractive market to investors, given its position as an economic powerhouse in Europe, its highly skilled workers, and its entrepreneurial spirit. It also has strong fundamentals, including a regionally diverse and well spread enterprise network, ranging from strong small-medium-sized enterprises (in Germany we call this the “Mittelstand”) to well established, world-renowned corporates. It is also actively welcoming investment in sectors we see as “good neighborhoods,” consistent with our global, high-conviction themes, such as the energy transition and content creation.
And how about with respect to Credit, Real Estate and Infrastructure, as well as our Private Wealth business?
Jurij: From a Credit standpoint, we have provided financing of €5.6 billion in Germany to date, including big transactions like TK Elevator. Germany has traditionally been funded through its three-pillared banking system. However, increased capital requirements are slowing corporate lending activity, and capital markets are increasingly volatile and unreliable. PE funds have raised significant dry powder and require leverage. These factors create a strong, secular need for private credit to fill the funding void of German corporates.
Similarly, our Real Estate colleagues are also big believers in Germany’s demand for logistics assets. Germany is uniquely positioned at the center of Europe, making it a strategically important logistics hub. This creates strong demand for warehouses and logistics assets, which we identified as a global megatrend. For the same reason, our Infrastructure colleagues also see Germany as an attractive market.
And, for our Private Wealth Solutions business, hiring Benjamin Binzer in Frankfurt has been an exciting addition. Germany has big potential for our semi-liquid private wealth products, and it is great to have him on the ground.
1 Figures from Q422 Blackstone data.