Blackstone's foray in private debt to heat up competition

It'll make investments from a fund managed by its specialised Tactical Opportunities Group

The planned entry of Blackstone in private debt business is expected to increase the competition in non bank lending business, say the industry veterans.

With the foray, Blackstone is expected to compete with the likes of KKR, Indostar, Indiainfoline, JM Financial, Edelweiss, Piramal Finance, Iamong others besides host of mutual funds, alternate investment funds who do debt deals.

"Blackstone's foray signals the positive outlook for demand for credit," said Vimal Bhandari, managing director at Indostar Capital Finance, promoted by Everstone, Goldman Sachs and others.

The firm, which manages about $90 billion in credit globally, will make the investments from a fund managed by its specialised Tactical Opportunities Group, reports said today.

Till now, Blackstone was doing equity deals in the country in general PE and real estate segments and invested over $ 3 billion each in both segments.

It is not known whether it will do debt in real estate segment.

"Globally, they are very big in debt transactions. With Indian economy picking up and investment cycle starting, they must have sensed a good opportunity here," said a senior banker who did not want to be identified.

The banker said Blackstone could look at lending to companies or distressed borrowers at similar or higher rate than its rivals.

Blackstone's American rival KKR has a big credit operations here and believed to have lent Rs 30,000 crore here. KKR runs a sector agnostic NBFC and a real estate focused NBFC in partnership with Singapore's GIC.

Blackstone is one of the largest asset management companies with over $367 billion in assets under management.