(Bloomberg) -- Blackstone Inc. is embracing its new role as a capital provider to Wall Street after sealing a half-dozen deals with banks involving about $7 billion worth of assets.
President Jon Gray disclosed the numbers Wednesday at the Goldman Sachs US Financial Services Conference and signaled the firm expects those kinds of deals to lighten bank balance sheets.
“We think that area will continue to grow,” he said.
In a typical deal with banks, an alternative asset manager takes a stake in a pool of loans that could include everything from home improvement to equipment loans. The transaction frees up banks’ balance sheets — even if they continue to service the loans and maintain a relationship with borrowers.
Gray’s statement underscores how money managers are major beneficiaries of shifting fortunes on Wall Street. The bank crisis in the US earlier this year and collapse of several regional players opened the door for Blackstone and alternative asset managers to provide capital relief to banks more broadly.
The fallout from the crisis further tilted the balance of power after private equity firms got bigger in the business of providing financing and owning loans in the past decade.
Blackstone is open to continuing to explore partnerships with other financial firms that aren’t banks to broaden its presence in asset-based finance, Gray said. These kinds of plays could involve making loans backed by assets such as railcars and airplanes.
The firm doesn’t intend to use its own corporate cash as it grows in this corner of finance, according to Gray. This would free Blackstone from the types of regulations that banks face.
As the $1 trillion firm expands into all corners of finance, it faces more scrutiny. Gray spoke as short seller Carson Block unveiled his bet against Blackstone Mortgage Trust, a publicly traded real estate investment trust. Shares of Blackstone and the trust fell after Block revealed the short.
Read More: Carson Block Shorts Blackstone Publicly Traded Mortgage REIT
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