Blackstone To Create Investment Vehicle With PIF For $40B

In order to improve infrastructure in the U.S, The Blackstone Group L.P. (NYSE:BX) and Saudi Arabia’s Public Investment Fund (PIF) have planned to create a new investment vehicle. For this, the two signed a non-binding memorandum of understanding (MoU) on May 20, 2017.

The program is expected to have an equity commitment of $40 billion, with PIF contributing an anchor amount of $20 billion. The remainder is expected to be raised by other investors.

Blackstone believes that with the help of this equity investment coupled with extra debt financing, it will be able to invest in more than $100 billion of infrastructure projects, mainly in the U.S.

Blackstone has been successfully and actively investing in infrastructure projects for the last few years. Notably, in the last 15 years, it invested in more than $40 billion projects globally.

This new venture is a result of almost a year’s discussion between Blackstone and PIF, starting in May 2016.

The American Society of Civil Engineers (ASCE) has given a D+ grade to the U.S. infrastructure. In fact, each American family needs to pay $3,400 per year because of the country’s degraded infrastructure. Thus, the new initiative will help the U.S. cater to its need of improvement in infrastructure.

Hamilton E. James, Blackstone’s President said, “There is broad agreement that the United States urgently needs to invest in its rapidly aging infrastructure. This will create well-paying American jobs and will lay the foundation for stronger long-term economic growth.”

Managing Director of the PIF, H.E. Yasir Al Rumayyan said, “The Public Investment Fund’s international investment strategy is built upon establishing strong global partnerships and identifying opportunities to maximize sustainable returns for the people of Saudi Arabia. We look forward to partnering with Blackstone, a recognized leader with a strong record of achievement across its extensive infrastructure projects. This potential investment reflects our positive views around the ambitious infrastructure initiatives being undertaken in the United States as announced by President Trump, and the strategic opportunity for the Public Investment Fund to achieve long-term returns given historical investment shortfalls.”

Shares of the company gained 21.9% in the last one year, outperforming the 10.3% growth for the Zacks categorized Investment Management industry.



Currently, Blackstone carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the finance space are Comerica Incorporated (NYSE:CMA) , Franklin Resources, Inc. (NYSE:BEN) and Raymond James Financial, Inc. (NYSE:RJF) .

Comerica witnessed an upward earnings estimate revision of 9.9% for the current year, in the last 60 days. Its share price increased 49.5%, in the last one year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Franklin carries a Zacks Rank #2 (Buy). It witnessed an upward earnings estimate revision of 6.7% for the current fiscal year, in the last 60 days. In the last one year, its share price increased 15.2%.

Raymond James also carries a Zacks Rank #2. For the current fiscal year, in the last 60 days, its Zacks Consensus Estimate has been revised 4.5% upward. Its share price increased 36.6% in the last one year.

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