Blackstone Inc. is in talks with regional banks about forming partnerships where they would make loans that the firm funnels to its insurance clients, underlining the growing heft of private capital’s heavyweights in financial markets.
(Bloomberg) — Blackstone Inc. is in talks with regional banks about forming partnerships where they would make loans that the firm funnels to its insurance clients, underlining the growing heft of private capital’s heavyweights in financial markets.
The alternative asset manager is in discussions with lenders with between $100 billion and $250 billion in assets, the FT reported Blackstone President Jon Gray as saying in an interview. He declined to name the lenders involved.
Under Gray’s proposal, the insurers would pay a fee to Blackstone for directing the assets to them, and they would hold the debt to maturity. He said firms like his could help banks offload some of the risk after a loan has been securitized, according to the report.
The comments expand on those Gray made on an April earnings call. “As regional banks experienced outflows of deposits, we are seeing real-time opportunities to partner with them at scale,” he said.
Products like auto finance, home improvement loans and equipment finance could likely attract Blackstone’s insurance capital. “We see this as an extremely favorable environment for deployment,” Gray said last month.
The collapse of four US regional banks since March has sparked turmoil in the financial sector and increased concerns that lenders may reduce access to credit. Banks reported tighter standards and weaker demand for loans in the first quarter, a Federal Reserve survey showed this week.
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Blackstone offers asset management services to large insurers such as American International Group Inc., the FT said. These customers are a natural home for assets that might otherwise stay on banks’ balance sheets, the newspaper reported Gray as saying.
–With assistance from Jan-Henrik Förster and Silas Brown.
(Adds comments from earnings call in fourth and fifth paragraph.)
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