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Blackstone’s Martin Brand: ‘High-quality assets will find a buyer’

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Summary

This article looks at the US economy in the second half of 2023 and the state of deal-making in the private equity industry. Martin Brand, head of North America private equity and global co-head of technology investing for Blackstone, discusses the challenges and opportunities for dealmakers, and reveals how Blackstone has been taking advantage of them. He believes high-quality assets will find a buyer, but that there is a mismatch between seller and buyer expectations. He also notes that Blackstone is focusing on sectors that benefit from technological transformation and the rise of marketplaces.

Q&As

What is Blackstone's forecast for the US economy in the second half of 2023?
The economy is strong, but the trajectory from here is highly uncertain. Inflation is increasingly in the rear view mirror, but more progress is needed on labor markets, and we expect the Fed will maintain higher rates for longer. Overall, we anticipate a deceleration of the economy.

What are the key challenges for dealmakers in 2023?
The key challenges for dealmakers in 2023 are higher rates, less debt availability, and economic uncertainty.

What are the key opportunities for dealmakers in 2023?
The key opportunities for dealmakers in 2023 are to stay disciplined and highly selective in which deals to pursue, focus on partnering with management teams to drive operational improvements, and seek out sectors that benefit from significant macro shifts.

What do Blackstone's recently closed acquisitions of Copeland and Cvent tell us about the environment for dealmaking in 2023?
The acquisitions of Copeland and Cvent tell us that Blackstone is focusing on corporate carveouts and take privates, and is looking for investments that benefit from long-term, secular mega-trends like the digitization of the economy and the energy transition.

What types of companies are most resilient to economic recessions?
Typical recession-resistant sectors historically have been healthcare or consumer staples. Companies that are market leaders with strong products and high growth are typically able to better weather recessionary periods and require less leverage.

AI Comments

👍 This article provides detailed insight into Martin Brand's view on dealmaking in the second half of 2023. It highlights the opportunities and challenges that dealmakers will face in the coming year, as well as the strategies that Blackstone is using to take advantage of them.

👎 This article does not fully address the potential risks of investing in high-quality assets during a recession. It also lacks information on how Blackstone is mitigating these risks.

AI Discussion

Me: It's about Blackstone's Martin Brand and his thoughts on dealmaking in the second half of 2023. He talks about the challenges and opportunities of the current market environment for private equity dealmakers. He also discusses take-private deals, corporate carveouts, and valuations.

Friend: Interesting. What are the implications of the article?

Me: One of the key implications is that high-quality assets will find a buyer, but mediocre or poor assets are more vulnerable to market volatility. Martin also suggests that AI can give private equity firms a competitive advantage, and that technology investments like software will remain attractive due to long-term growth potential. He also notes that sellers may need to become more realistic in terms of pricing in order to close deals.

Action items

Research recession-resistant sectors and identify potential investment opportunities.
Analyze the current market conditions and identify areas where buyer and seller expectations intersect.
Develop a strategy for investing in high-quality assets and take advantage of market dislocations.

Technical terms

Blackstone: A global investment firm that specializes in private equity, credit, and hedge fund investment strategies.
High-quality assets: Assets that are expected to generate a higher return than average.
Market dislocation: A situation in which the price of an asset does not reflect its true value.
Secular mega-trends: Long-term trends that are expected to have a lasting impact on the economy.
Corporate carveout: A transaction in which a company sells a portion of its business to a private equity firm.
Take-private deals: Deals in which a publicly traded company is taken private by a private equity firm.
Proprietary opportunities: Deals that are created by a private equity firm.
Recession-resistant sectors: Sectors of the economy that are expected to remain stable during a recession.
Bid-ask front: The difference between the price a buyer is willing to pay for an asset and the price a seller is willing to accept.
Generative AI: A type of artificial intelligence that is capable of generating new data from existing data.