China's State Investment Company plans to invest US$3 billion into The Blackstone Group.
The purchase price per common unit will be 95.5% of the public offering price in Blackstone's planned initial public offering. The number of non-voting common units purchased by the State Investment Company will be reduced if necessary so that the State Investment Company's equity interest in Blackstone immediately following the planned initial public offering remains under 10%. The State Investment Company has agreed to hold its investment in Blackstone for at least four years.
The Chinese Government has formed this state foreign exchange investment company, whose formal name has yet to be determined and is therefore now known as State Investment Company, to handle China's vast wealth of foreign reserves. The Chinese government institution will report directly to the State Council of China.
Lou Jiwei, head of the working group of the State Investment Company, said: "We are very pleased to be able to make the State Investment Company's very first investment in such a well-respected firm as Blackstone."
The $3 billion sale of non-voting common units to State Investment Company will close concurrently with Blackstone's planned $4 billion initial public offering.
Stephen A. Schwarzman, chairman, chief executive officer and co-founder of Blackstone, said: "We are pleased to welcome the State Investment Company as an equity owner of our firm. We are proud to be part of such a significant transaction for both of our organizations."
The Blackstone Group is one of the largest independent alternative asset managers in the world. Its alternative asset management businesses include the management of corporate private equity funds, real estate opportunity funds, funds of hedge funds, mezzanine funds, senior debt funds, proprietary hedge funds and closed-end mutual funds.
