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Market Views

The Connection

January 30, 2024

From our unique private market vantage, we can draw lines between macro, market and investment trends and help investors see how it all connects.

January 30, 2024

Joe Zidle, Chief Investment Strategist, Blackstone Private Wealth Solutions

InVESTMENT sTRATEGY

A Virtuous Cycle Takes Shape

by Joe Zidle, Chief Investment Strategist, Private Wealth Solutions

I keep a fun book on my desk: “Wrong: the Biggest Mistakes and Miscalculations Ever Made by People Who Should Have Known Better”. I browsed through it recently, seeking reassurance for my 2023 recession call. I take some solace in that last year presented a remarkable tale of economic resilience. Defying the looming shadow of rising interest rates, the economy didn’t merely stabilize—it accelerated.

In 2024, the debate about a hard, soft, or non-existent landing should reach a resolution. With real rates (adjusted for inflation) positive for about a year and the depletion of excess savings in household balance sheets, the economy’s now feeling the full impact of the Fed’s policies. Indicators such as the yield curve, Institute for Supply Management surveys, and Purchasing Managers Indices point towards a growth slowdown, the extent of which we should better understand by the second half.

We believe that 2024 could mark the end of the COVID-era recovery, with the U.S. economy emerging from a liquidity trap, a pivotal shift that not only redefines our current economic understanding but also alters our future expectations.

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PRIVATE MARKET LENS

Insights from Blackstone Portfolio Companies

by Prakash Melwani, Global Chief Investment Officer, Private Equity

Many pandemic-era distortions have faded, based on Blackstone’s survey of CEOs at its corporate private equity portfolio companies. High interest rates and slowing growth still rank high among respondents, but most don’t see recession in 2024.

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GUEST COLUMN

Private Equity in a Changing Landscape

by Joseph Baratta, Global Head of Private Equity
Christopher James, Chief Operating Officer of Tactical Opportunities, Chairperson of Blackstone Private Equity Strategies (BXPE)

The opportunity set in private equity appears especially attractive in this higher-cost-of-capital market environment, but only when managers can really focus on what’s critical to driving returns under these conditions.

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FROM INSIGHTS TO PRACTICE

Challenging Times Require More Tools

by Anders Nielsen, Managing Director, Private Wealth Solutions

In an era of higher average interest rates, where can investors find the tools and key asset classes they need for such strategic allocations?

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The views expressed in this commentary are the personal views of the authors and do not necessarily reflect the views of Blackstone Inc. (together with its affiliates, “Blackstone”). The views expressed reflect the current views of the authors as of the date hereof, and neither the authors nor Blackstone undertake any responsibility to advise you of any changes in the views expressed herein.

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Tax considerations, margin requirements, commissions and other transaction costs may significantly affect the economic consequences of any transaction concepts referenced in this commentary and should be reviewed carefully with one’s investment and tax advisors. All information in this commentary is believed to be reliable as of the date on which this commentary was issued, and has been obtained from public sources believed to be reliable. No representation or warranty, either express or implied, is provided in relation to the accuracy or completeness of the information contained herein.

This commentary does not constitute an offer to sell any securities or the solicitation of an offer to purchase any securities. This commentary discusses broad market, industry or sector trends, or other general economic, market or political conditions and has not been provided in a fiduciary capacity under ERISA and should not be construed as research, investment advice, or any investment recommendation. Past performance is not necessarily indicative of future performance.

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