Story of the year: The man who oversees Blackstone’s fundraising bonanza

Since Jonathan Gray's appointment as president at the beginning of 2018 the firm has seen a fundraising bonanza, with predictions its AUM could hit $1trn in the next eight years.

It’s not everyone who is considered to become US Treasury Secretary, but Jonathan Gray has been just that.

Gray, who had been Blackstone‘s global real estate head since 2005, took over from Tony James as the private equity giant’s president in February with James becoming executive vice-chairman. The firm, like Carlyle Group, KKR and Apollo Global Management, set up its new generation of leaders in the last couple of years.

Long-rumoured to be a successor at Blackstone, Gray helped build out the largest real estate platform in the world, which now boasts $120 billion in investor capital under management. Speaking to sister publication PERE in February about his appointment, Gray said the promotion had been in the works for “several years” as he had devoted less time to real estate and more to learning firm-wide lessons from James.

Jonathan Gray

Gray, who supported Trump’s opponent, Democratic nominee Hillary Clinton, told Politico at the time he was under consideration for the Treasury post that he had “much work to do at Blackstone”.

Since his appointment at the helm of Blackstone’s day-to-day operations, Gray has overseen a fundraising bonanza. Blackstone pulled in $124.6 billion in the year to 30 September and has its sights set on a new flagship fund – expected to be around $20 billion. As of end September assets under management stood at $457 billion and the firm predicts it could hit $1 trillion in the next eight years, according to James.

At a conference in New York in May, Gray identified retail investors and the insurance market as areas which offered an enormous amount of “white space” for Blackstone, and that the firm was working to create products to suit their specific needs.

“We’ve obviously got to create products that in some cases have different regulatory capital needs or more current income for retail investors,” he said. On insurance, Blackstone’s goal is to be an asset manager and to “not really be on the liability side of the equation”, he added. The firm has no plans to replicate what Apollo has done with fixed-annuity insurance company Athene, which it created in 2009 and retained a significant stake when Athene went public in 2016, Gray said.

Gray has also expressed a desire to add more of a growth orientation to the firm’s investments, boosting capital spending in areas including Asia, technology, growth equity and life sciences. The future looks bright for Blackstone in 2019.

– Isobel Markham and Megan Morris contributed to this report.

– This story has been updated to show AUM at the end of September was $457 billion.