From thematic investing to
dealing during COVID, panelists in the Dealmakers Roundup during The
BHN Group’s HICAP Australia New Zealand talked about their experiences and gave tips to the audience.
The
panel was moderated by Tony Ryan, principal at Sydney-based Ryan Capital
Partners and featured Craig Newman, managing director of real estate for New
York-based Blackstone Real Estate; Serena Lim, chief growth officer for
Singapore-based The Ascott Limited; and Jerry Schwartz, director for
Sydney-based Schwartz Family Co. The panelists also discussed navigating the
different corporate cultures when working with companies in the U.S., the U.K.
and Singapore.
Here
are highlights from the discussion.
Tony Ryan: Can you talk about the “thematic investing”
theory at Blackstone?
Craig Newman: We look across the
world, and we’re trying to find things that we think are going to produce good
results over the long term or medium term, depending on the investment
strategy. But we take advantage of a global platform. With the scale of the portfolio,
we certainly see what’s going on trend-wise in different markets. And we can
also look and say, well, this played out in a country that has similar
fundamentals to Australia, for example. So, let’s go along into that particular
sector.
Logistics
is an example of retail spending diverting from bricks and mortar to
e-commerce. We saw that play out for needing more sheds and warehouses to store
goods versus putting them in the stores. So, that was a trigger for us to say, 'Let’s go long on industrial.' We did that around the world, and we continue to
hold a massive proportion of our portfolio in logistics assets.
Ryan: What other themes are Blackstone anticipating over
the next 3 to 5 years?
Newman: Leisure is definitely a key sector for us. In
Australia, we’ve struggled to get a bigger foothold. We want to buy more. It’s
challenging, and it is hard to acquire assets… We see Australia as a good
travel and leisure market. And I think we’ve seen that around the world.
We like Great
Wolf Resorts in the U.S. and Border Leisure in the U.K.
We just see this pent-up demand for travel, and it’s playing out. There’s been
a move away from consumerism for goods to experience. And that’s where hotels
play a big part.
Ryan: Can you talk about the Schwarz Family Co’s unique
debt story and eventually finding a partner with Blackstone?
Jerry Schwartz: They became our lenders
in the middle of COVID, which is amazing. And that was because I had three
banks, not syndicated but working separately. And obviously, what happens in
these situations is if something goes wrong, you have the domino effect. So it’s
the second time it’s happened to me with the Commonwealth Bank (of Australia).
They had given me a hard time, and it affected the two other banks… They said
in the middle of COVID, 'I want my money back.' I had about 50 transaction
accounts, which makes them a lot of money. And they wanted them all closed…
I have to admit, having set up the financing during COVID was an amazing
situation. I was concerned. You look at it in different ways. Blackstone is
very prudent. The lender has to be very careful.
Ryan: Is it better to deal with one bank instead of
three?
Schwartz: Obviously one
because you want to answer to one person, not three different entities. And
what happened in my situation was the two other banks were very accepting of
the COVID situation. It was just the one bank which was not. And that made the two
others concerned about what they wanted to be.
Ryan: Can you talk about different corporate cultures and
doing business in multiple countries
Newman: Our head office now is in New York, which means we
have calls at horrible hours of the night. So, there is an adjustment... When
you’re in Australia, your head office tends to be where you are. So, you’re much
closer to the decision making. That said, Blackstone is a very centralized
business. We have one investment committee. So, all decisions come out of that
committee…
I
would say Blackstone has a very global lens and thinks as you would expect,
versus… domestics, which tend to have a very domestic local focus, not to say
that’s wrong. I think it’s obvious expertise in markets is very important and
local knowledge and relationships… But moving to Blackstone, you realize you
are operating in one market as part of a global business.
Serena Lim: [To Newman] I hear
you about the calls… What is quite common within the three companies [I’ve
worked for that were based in the U.S., U.K. and Singapore], they want to
embrace diversity, embrace differences, and embrace disruption, and all three have
this sort of sub-mentality as they move forward with growth ambitions. But how
it’s manifested in the three companies is very different…

From my personal experience, I think for the U.S., you just have to talk louder. For the U.K. companies, you have to do a bit more socializing. For Singapore, it’s show me the numbers. It’s the data.
Serena Lim
From
my personal experience, I think for the U.S., you just have to talk louder. For
the U.K. companies, you have to do a bit more socializing. For
Singapore, it’s show me the numbers. It’s the data… I think that’s the
underlying principles of the three companies in terms of how you do it, what
the whole mindset is, and how you bring that to life.
Ryan: What are some deal tips based on your experience?
Schwartz: Transparency is
really important. Speak your mind. Don’t beat around the bush. Be transparent
and open. That’s what I found is the best success tool.
Lim: I think a principled approach… Many times
you go into new deal-making sessions, and the person you meet socially and the
same person you meet at the table have entirely different personas. So, I
think it’s this whole notion of being yourself, building trust, and being
principled.
You have to be very clear about knowing where you want to go. And
having that clarity in purpose in business ambition is also very critical. And
then being able to execute that in a very principled way that’s transparent and
builds trust… Active listening is something that I would like to mention as
well. Sometimes, too much conversation is happening, and no one is listening.
Newman: It applies at home and work. It’s the art of
compromise and understanding what’s important, what you can give and what you
can let go. And ultimately, you want to end a transaction where both parties
are satisfied with the outcome. There’s a lot to be said by just
meeting in the middle on some things.