Blackstone sees $200B opportunity in Europe credit - report

Blackstone (NYSE:BX) sees the potential to invest $200B in European credit over the next decade, as the region provides an attractive alternative to the U.S., according to a media interview.

Michael Zawadzki, Blackstone's (NYSE:BX) chief investment officer for credit and insurance, highlighted Europe's improved fiscal and monetary backdrop combined with tailwinds in infrastructure and defense spending in an interview on Bloomberg Television. Earlier this month, Blackstone CEO Steve Schwarzmann said he expects the firm to invest as much in $500B in Europe, overall, over the next 10 years.

"In credit specifically, because there’s less capital here in Europe, we see excess spreads, we see lower leverage levels, that’s why we have been active," he said. 

Zawadzki expects Europe's still-nascent asset-backed finance and infrastructure debt markets to grow. Last year was Blackstone's (BX) most active year yet in European private credit, he added.

While some, including S&P Global Ratings, have been calling for increased oversight and transparency in Europe's private credit market, Zawadzki is comfortable with current regulations. The company's clients access private credit mostly through long-dated, closed-end, funds, which have a strong asset-liability match.

"Even in our vehicles that target individual investors, we have designed caps on liquidity, such that we match the risk that we have in the underlying portfolio," he said. That means, for Blackstone (BX), "every dollar that goes into the private credit system actually de-risks the market," he noted.

Blackstone (BX) stock rose 0.2% in premarket trading.