Blackstone's Steve Schwarzman Talks about Alternative Investing
Stephen 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
