Blackstone Energy Prospects Remain Bright

Chidem Kurdas

After years of investing in energy through a variety of strategies, Blackstone chief Stephen Schwarzman remains upbeat about prospects. He says there is a lot of room to grow in the energy complex.

Blackstone’s energy private equity fund has already invested 40% to 50% of its capital and has very substantial opportunities, he said at an earnings call. The fund closed with more than $2.5 billion in capital last year.

Last week the company announced the formation of Fisterra Energy, owned by Blackstone funds, to undertake large-scale power projects mainly in Latin America, Europe and the Middle East.

While Mr. Schwarzman stressed private equity investments in energy, Blackstone has a multi-asset approach. Thus in 2011, its credit arm GSO Capital Partners was the lead investor in Saratoga Resources, an oil and gas development company that went through bankruptcy. Blackstone also seeds and allocates to commodity and energy hedge funds.

From a broader perspective as well, Mr. Schwarzman mentioned energy as a major positive factor for America’s economic future. He said the impact of energy independence is huge for the country and, assuming natural gas production continues strong, is a driver of growth.

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