Blackstone Group LP's massive U.S. infrastructure fund backed by Saudi Arabia's sovereign fund will stay on track despite simmering diplomatic tensions between that country and the U.S., Chairman and CEO Steve Schwarzman said.

The $40 billion investment vehicle, announced in May 2017, will include a $20 billion investment from Saudi Arabia's Public Investment Fund when fully raised. The fund has gathered $5 billion so far, Schwarzman said during an Oct. 18 conference call to discuss third-quarter earnings.

The fund's outlook has come into question in the wake of the disappearance of journalist and American resident Jamal Khashoggi after he entered the Saudi consulate in Istanbul, Turkey. Turkish officials have said agents tied to the Saudi government murdered the journalist, and though Saudi Arabia has denied any involvement, several high-profile U.S. executives have canceled plans to attend a major investment conference in the country's capital, Riyadh.

Those executives have included Schwarzman and Larry Fink, the chief of asset management giant BlackRock Inc., as well as JPMorgan Chase & Co. CEO Jamie Dimon and KKR & Co. co-President and co-COO Joseph Bae.

"Like everybody, we've been concerned about what we've been reading the last couple of weeks," Schwarzman said in response to an analyst's question about the infrastructure fund's future. The analyst said he had received many questions from investors about the matter.

"That said, for us, we take a long-term approach both to our relationships and to building businesses," Schwarzman said. "We have relationships with [Saudi Arabia and its] institutions over decades, and when we look forward, we've made commitments that are often a decade or longer."

In the near term, Blackstone "may get some questions" about concerns over its fundraising for the infrastructure vehicle, the executive said, but he added that investors trust the company because Blackstone is the sole general partner of the capital.

"We have 100% discretion as to where we invest, when we invest, how we manage the assets, how we sell," he said. "This business is very much on the path to growing to large scale, regardless of some near-term challenges."

Blackstone hopes to announce its initial targets for the fund "over the next couple of quarters," Schwarzman said.