Officially out of post-IPO hiding, Steve Schwarzman took the stage at Davos today to discuss sovereign wealth funds. And he spoke truth to hysteria:
“We come about this from the world of the practitioners and we’ve encountered sovereign wealth funds as investors in our funds and investors in our firm. So this has been a 20-year kind of relationship and it’s almost amusing to see pools of capital we’ve dealt with forever in a normal way have a new name: sovereign wealth funds, where there’s supposed to be some inherent threat that journalists write about…
In point of fact, we’ve seen them across a number of the businesses we are in… and they’re among the most professional investors in the world. The difference of going to a sovereign wealth fund for money and going to a state pen fund in the U.S. is veritably nothing.
Our experience with sovereign wealth funds is that they are smart, they’re long term, they’re highly professional. All they are looking for is to earn the highest rate of return with safety that they can… They’re really model-type investors.”
Methinks that Steve sees something of himself and private equity in sovereign wealth funds. Not the specific model, per se, but in the change in public perception from a niche industry under the radar to financial demons.
Here’s video of the entire panel. Schwarzman begins speaking at around the 23-minute mark: