“We were not interested [in Europe] when prices were very high, growth was very low and a lot of people other than us had a lot of enthusiasm,” CEO Stephen Schwarzman said in a speech to the Economic Club of Canada in Toronto.
But a $1 trillion emergency aid package to stabilize the euro and prevent the spread of a sovereign debt crisis in Europe may lead to changes that make deals more likely for the private equity firm going forward, he said.
“What I have found in life is that when the environment changes and people recognize that there are issues, that valuations over time tend to drift down, which might make it more interesting for us,” Schwarzman said.
Schwarzman said that he likes “China, India, and everything that touches them” for future growth.
He added that, overall, the prospects for the U.S. economy are “surprisingly good,” with a U-Shaped recovery apparently taking hold, a reference to the gradual rise in certain economic measures, such as employment, GDP and industrial output.
The ability for private equity firms to carry off large buyouts is returning. Blackstone, with two other private equity firms, is in talks to buy Fidelity National Information Services Inc., sources familiar with the situation have told Reuters.
Blackstone, which has invested in Hilton hotels, Freescale Semiconductor and SeaWorld theme parks, also has a number of portfolio companies in various stages of launching IPOs.
For the second half of 2009 and the first quarter of 2010, it completed or has in process about 12 exits, either by IPOs and subsequent secondary sales, dividend recapitalization or by a strategic sale.
The market for leveraged buyout-backed IPOs can be streaky, but right now the market is responsive, Schwarzman said.
IPOs from his firm have outperformed comparable company offerings by about 48%, he said. —John McCrank, ReutersPav Jordan of Reuters contributed to this story.