Minds will differ on the implications, but the fact that the Chinese government has jumped on the private equity/alternative assets bandwagon is a sign of the times.
It remains to be seen if China’s $3 billion investment in the Blackstone Group signals a top, or the next bull phase in liquidity’s big adventure. While the world ponders the issue, we can at least state the obvious: the global economy has more cash than it knows what to do with. Beijing in particular is swimming in it, so why not put a bit into private equity?
“With all the money that has flowed to China and the cash they’ve built up, they’re looking for ways to put it to work,” Colin Blaydon, director of the Center for Private Equity and Entrepreneurship at Dartmouth College, told Bloomberg News.
Strategic-minded investors can only sit back and wonder what the effect of all the liquidity will be down the road. Perhaps there really is a pot of gold at the end of this rainbow. For the time being, notions of anything less are out of favor.