Blackstone's Gray on UK Policies, Private Credit, Impact of Iran War

Great to be with you. It feels like extraordinary times because of everything that's happening in the world.

Well, first off, our thoughts are with everybody in the Middle East. We have a lot of friends and colleagues there, and hopefully this gets resolved quickly for everybody. I think for us, we tend to take a longer term view. I mean, obviously in the near term, if you're trying to get an IPO done or transactions, things are paused while this volatility plays through. But what we've learned over time and you saw this last year with Liberation Day, you saw this with Covid in the past, that you don't want to be too quick because these things can settle. And I think in this case, the war will settle. And then what comes back is to focus on the main thing. And of course, the main thing today is what's happening in AI, this enormous investment that's going on there, the productivity gains, some of the issues around disruption. So near term, I think it slows things. But then I think we revert back to sort of underlying fundamentals, also a healthy economy and inflation falling, which should allow transaction activity to pick up near-term. A little foggy here, but I think the outlook after this is probably pretty good.

No, I don't think so. I mean, you look at the price of oil and given day, I guess yesterday moved $30. I think, again, once the conflict settles, I think oil prices move back down. And what will matter more then is, hey, companies earnings are growing strongly. Inflation is heading down. The Fed is likely to cut rates and we should see a pickup in transaction activity. Now, I think the area that will be tougher is those areas perceived as being more vulnerable to disruption. That will be more challenging. But we have a couple of businesses we took public at the end of last year. Medline in hospital supplies, legions and energy management. These stocks are up, you know, 50, 80% because they continue to grow and the market's looking for sort of terra firma companies. They feel good about longer term. And I think that desire for those kind of businesses and those benefit businesses that benefit for me, I will continue. So I view this more as a pause as opposed to something that's longer in nature.

Yeah, and it's unclear where it ends. I think AI is completely transformative in almost every aspect of our lives in business. The idea that we have superintelligence at massive scale will just be so powerful. And so the key for investors is, how can I invest against that? We've been the biggest investors in the world in digital infrastructure data centers. We're probably the leading investor in power electricity, giving capital to utilities, electrical equipment. I mean, that foundation needs to be put in place first. But then you've got to apply it at your companies. How do you do something, you know, work base rules, base processing, accounting, legal. So much is going to change. And on the really positive front, and I know there's a lot of worries which are rightfully about what it means for society, but what it's going to do for health care in precision medicine. I think some of those benefits will be truly extraordinary. And I would just say at Blackstone, pretty much every investment is looked through a lens of AI. 20 years of operating history becomes less important as to what is the world going to look like? How will this business be impacted? We have enough humility to know we don't know the answer, but if we focus on it, it allows us, I think, to be better investors. And again, that's sort of the way to look at the world going forward.