Blackstone/China: China’s buyout bet

Beijing is handing over $3bn from its huge foreign exchange reserves to take a stake of less than 10% in Blackstone. This will add further firepower to private equity. But talk of a market «melt-up» is overdone. Foreigners often arrive when bubbles are near their end. In this case, there may be no greater fools than the Chinese bureaucrats who are taking this buyout bet on the private equity firm’s non-voting stock. The Chinese authorities want their $1.2 trillion of foreign exchange reserves t...