Private equity billionaire Stephen A Schwarzman, whose Blackstone Group has been an aggressive investor in China, last weekend marked the start of a new $435 million elite scholarship program at Beijing’s Tsinghua University campus. Schwarzman Scholars welcomed its inaugural class of 110 students with a mission of deepening understanding between China and the West, in one of China’s largest-ever philanthropic initiatives.
Schwarzman – Blackstone’s chairman, CEO and co-founder – personally contributed $100 million to the ambitious education project inspired by Oxford University’s Rhodes Scholarship. The selective program aims to raise more than $450 million and will be endowed in perpetuity to support up to 200 students per year, 45 percent of them from the US and another 20 percent from China. The students will work toward a one-year master’s degree while immersing themselves in Chinese culture.
Blackstone Chief Picks Up More Key Contacts
The new scholarship launches as Blackstone ramps up its investments in Asia and its partnerships with Chinese firms active in the property sector, which include such high-profile players as Anbang Insurance Group and China Vanke. Blackstone has invested in a wide variety of property assets in China, including a joint venture logistics development platform with Vanke, a portfolio of shopping centres and office towers. The Manhattan-based alternative investment giant has some $356 billion of assets under management worldwide including $103 billion of real estate assets, according to its corporate website.
The scholarship program backed by Blackstone’s boss is housed in a new LEED Gold-certified building on the campus of prestigious Tsinghua University. The school counts among its graduates many of China’s political elites including current president Xi Jinping and former top leader Hu Jintao.
Since Schwarzman first announced the program in April 2013, the billionaire’s initiative has attracted other donors with significant investments in China, including such as Boeing, Disney, GE, and Volkswagen. Schwarzman has made clear that his own involvement in the program is on a personal basis and that the scholarships are not connected to Blackstone.
“A win-win relationship of mutual respect and understanding between China and the West is vital to continued global peace and prosperity,” Schwarzman commented at the program’s convocation last weekend. “These scholars, and those who follow, will play an important role in fostering friendship, cooperation, and collaboration in our increasingly interconnected and constantly shrinking world.”
Blackstone’s Win-Win Relationship with China
Blackstone achieved its first big link with China in 2007, when China Investment Corporation (CIC), the country’s sovereign wealth fund, bought a $3 billion stake in the private equity giant as it prepared to go public. Since then, Blackstone been successful at raising capital from the mainland’s state-backed institutional investors for its global funds.
The Manhattan-based investment firm has also made a number of property deals on the mainland, including buying Hong Kong-listed developer Tysan for $322 million in 2013, and following up later that year by spending $400 million on a 40 percent stake in Shenzhen mall developer SZITIC Commercial Property (now known as SCP).
In August, Vanke confirmed it had inked a $1.9 billion deal with Blackstone to buy Blackstone’s stake in the SCP retail portfolio. Blackstone sold Tysan to privately owned mainland conglomerate HNA Group earlier this year for $337 million.
Blackstone has also done well selling some of its global assets to Chinese buyers. Anbang Insurance, which is among the major contributors to the Schwarzman Scholars program is estimated to have purchased nearly $8.9 billion in real estate for Blackstone in less than two years, including New York’s Waldorf Astoria in 2014, a 26-storey Manhattan office tower in 2015, and the $6.5 billion Strategic Hotels and Resorts portfolio in March 2016.