A federal government infrastructure initiative, as proposed in President Donald Trump's State of the Union address, would be "a cherry on a sundae" for Blackstone Group LP's burgeoning infrastructure efforts, but is not necessary for the program's success, Chairman and CEO Steve Schwarzman said.
Schwarzman said in a conference call that Blackstone's infrastructure initiative is moving forward but is months away from closing its first investment. The project has up to a $20 billion commitment from a sovereign investor — previously identified as Saudi Arabia's Public Investment Fund — which Blackstone will take in as matching capital is raised, he said.
Schwarzman previously said the alternative asset manager would close its first infrastructure investment in the first quarter of 2018. The firm has said it expects to invest more than $100 billion in U.S. infrastructure projects.
As outlined by Trump, the $1.5 trillion federal infrastructure program would provide additional opportunities for Blackstone "to put money out in scale," Schwarzman said on the call, adding that "it can only be a good thing, in principle, to have more opportunities of different types."
Blackstone executives emphasized, however, that the firm's own infrastructure investments do not depend on the government's plans.
Public-private partnerships on infrastructure projects "will be sort of a cherry on a sundae for us," Schwarzman said, adding: "We sort of have the sundae, in terms of what we think we're going to be doing in the private sector."
"We don't need any improved legislation or regulatory system to invest this fund really well," President and Chief Operating Officer Tony James added. "There's tons of existing assets out there."
KKR & Co. LP is also marketing an infrastructure fund, in response to what an executive there called an "enormous" global need for infrastructure investments.
