Blackstone Group LP would target as much as $40 billion for infrastructure deals if the world's biggest private equity firm re-enters the sector, one of its top dealmakers said.
“To be relevant in that end of the market I think you need to be deploying billions of dollars at a time, not hundreds of millions, and so you're probably talking about a vehicle that's $20 billion, $30 billion, $40 billion dollars of equity,” Joe Baratta, Blackstone's global head of private equity, said Tuesday in an interview with Bloomberg Television's Erik Schatzker.
The current political climate -- in which Republicans and Democrats agree that more infrastructure spending is required in the U.S. -- is, for the first time, positioning government entities to engage with private capital providers “to do major infrastructure projects,” said Mr. Baratta, 46. Blackstone hasn't yet started an effort to raise new money for such deals, he said.
Blackstone tried raising at least $2 billion for an infrastructure fund after the global financial crisis, but then spun the group out in 2011 to become Stonepeak Infrastructure Partners. Blackstone has mulled restarting an infrastructure effort for a while, President Tony James said last week on an earnings conference call with analysts, adding that the firm has “plans to add funds in that space.”
Private infrastructure funds had a record $373 billion under management as of June 2016, according to research firm Preqin. About 38% of that amount is dry powder, or money that hasn't yet been deployed.