Blackstone's Steve Schwarzman Talks about Alternative InvestingStephen Schwarzman, chairman and chief executive officer of Blackstone Group LP, said “the alternative class, the stuff we do, tends to make somewhere around 1,000 basis points more than the stock market.”
That was in response to a question from Bloomberg TV’s Stephanie Ruhle about Blackstone's move to attract more individual investors. Blackstone and others are pushing to include alternative assets -- a catch-all category for non-traditional investments such as hedge funds, private equity, commodities and real estate -- as an option in the $4.2 trillion universe of U.S. 401(k) retirement funds. By not having alternative assets as an option in retirement plans, the average individual is disadvantaged and left behind, according to Schwarzman.
Who wouldn't want returns of 1,000 basis points, or 10 percentage points, more than the stock market? Unfortunately, it’s almost impossible for sophisticated investors to get that in any investment. As a group, alternative investments don’t produce anywhere near those returns. After their hefty fees, many kinds of alternative assets actually do much worse than stocks.Source: Bloomberg