Crown Resorts Suitor Blackstone Has $11B to Spend in Asia

Posted on: April 13, 2022, 05:38h. 

Last updated on: April 13, 2022, 01:46h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Asia is going to be a strong part of the Blackstone Group’s future. The private equity investment firm purchasing Crown Resorts has big plans for expansion in the region.

Blackstone Group
A sign outside Blackstone Group’s office in New York. The private equity investment firm and Crown Resorts buyer has its eyes on Asia expansion. (Image: Bloomberg)

Asia is the new land of opportunity. The casino industry already has its eye on the region, with companies such as Las Vegas Sands, Wynn Resorts, and others exploring options there. The Blackstone Group, which has its hands in a number of industries, including gaming, is on the same page.

Blackstone’s interest isn’t solely related to the potential for gaming success in the region. In a recent interview with Nikkei Asia, a spokesperson detailed some of what it has in mind. The company’s dedication to the region is a further example of Asia’s role in the future.

Asia Becomes a Hot Commodity

Jonathan Gray, Blackstone’s president and chief operating officer, has seen the future, and it includes Asia. Despite known risks out of China and elsewhere, he’s so confident that he’s willing to hedge big money.

The firm isn’t going to concentrate all of its assets on the gaming industry, although it will likely be a part of it. Instead, technology, logistics and real estate will also be targets. All three of these, however, are intrinsically linked to gaming.

Blackstone, which wants to have $1 trillion in assets under management by 2026, already has a strong foothold in Asia. It owns a large, 242-acre tract in Guangzhou, China, next to Macau. The company also owns more than “$10 billion of real estate in Japan,” according to Gray, and wants to do more in the country. It won’t be too much longer before Japan begins to realize its integrated resort dreams.

Gray added that the company is focusing heavily on real estate and “logistics warehouses,” which has been a successful business strategy. As a result of its success in Asia, Blackstone raised $6.4 billion to fill a new fund that will target expansion there. That, combined with its existing global fund, gives it $11 billion in “buying power” in the region.

Caution Warranted

Despite the positive results and the strong markers for growth, Gray recognizes a need to approach Asia with a certain amount of trepidation. China may be growing to become one of the largest markets, but it also faces issues that could cause an implosion.

China is facing problems in its housing and capital markets that cause concern. Specifically, real estate developers now have virtually no access to lending channels following an overzealous development plan that led to a real estate glut. The scandal surrounding Evergrande, once a “too-big-to-fail” developer, and its financial troubles highlighted the issues.

Lukewarm relations between China and the US don’t help. However, there are plenty of options outside of China to consider. Blackstone has found ways to tap into them and “sustainability-related” operations that can withstand most consumer market variations.

Among these are transportation and logistics facilities. They’re both always in need and become inherent components of economic infrastructure. They’re also important components of any gaming ecosystem in any region.