Blackstone / private equity, too early to return to buying?Blackstone Inc.BATS:BXSwissquoteBlackstone: should one return to buying private equity while the drawdown since the beginning of January 2025 has already reached 50%? This is the question many are asking today, as the macroeconomic and financial environment remains tense and the current geopolitical situation does not help. Blackstone is a major player in alternative asset management, with a highly diversified portfolio, but private equity remains at the core of its business model. The idea behind private equity in the stock market is simple: raise capital from institutional investors, invest it in unlisted companies, develop them through growth, restructuring or financial optimization, and then resell them at a capital gain. The chart below shows the daily Japanese candlesticks of Blackstone’s stock. However, private equity has been suffering in the stock market since the end of 2024. Blackstone is also very active in real estate, private credit and other alternative strategies, and this diversification allows it to smooth its revenues, but the pressure on private equity is being felt. On a global scale, Blackstone is among the leaders in the sector, alongside KKR, Apollo, Carlyle or EQT, and these four stocks have also been struggling in the stock market since the beginning of 2025. So what is the problem with these private equity management firms and when will it be interesting to return to buying? First of all, there must be a global stabilization of risky assets in the stock market, and therefore a geopolitical easing and a stabilization of energy prices in the market. But the key problem is high interest rates because private equity relies on leverage (LBO). With high rates: • Debt becomes more expensive, reducing deal profitability • Valuations are under pressure • The market reprices the entire sector and drives a general correction The outlook for Fed monetary policy is therefore decisive to consider returning to buying in the private equity sector in the stock market. Here are the signals to monitor for a return to buying private equity companies such as Blackstone: • More favorable macro cycle: unlisted companies are very sensitive to the global business cycle • Risk appetite through a return of geopolitical stability: there must be a concrete easing in the Middle East, notably through the reopening of the Strait of Hormuz • Monetary policy / inflation expectations: any scenario of further monetary tightening by the Fed must be ruled out Without these conditions, it is risky to rush back into buying private equity in the stock market. Blackstone nevertheless retains strong fundamentals that make it a long-term choice. But short-term timing for a purchase in private equity requires patience and observation of the overall market, particularly the end of rising interest rates and the end of the current conflict in the Middle East. In summary, Blackstone remains essential in private equity, but the timing to buy depends heavily on interest rates and the global cycle of risk appetite and risk aversion. A premature entry may be penalized by the market, and timing must be carefully managed from a technical analysis perspective, with a major support zone between $80 and $100 as illustrated in the chart below. DISCLAIMER: This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. 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