Economic Situation: Europe Temporarily Lost Russia

Su Shimin (Stephen Schwarzman) belongs to the small group of financiers who are in the forefront of the private sector in the 80s.

The Black Rock Inc, which he co founded with Blackstone, has become the largest private equity fund management company in the world with assets of $284 billion, ranging from companies, credit, hedge funds to real estate.

In 2007, he succeeded in making the Black Rock Inc go public on the eve of the financial crisis.

As a billionaire and Republican member of the United States, Su Shimin, 67, is still actively involved in the operation of the company.

You donated $one hundred million to China and set up an international scholarship program for "Su Shimin scholars".

Why do we particularly value China?

China's development and its relevance to the world will become the most important change in twenty-first Century.

So, I am looking for a way to cultivate future leaders who understand China and understand China.

At the same time, through this project, we will explore people who have potential to become Chinese leaders in the future.

Therefore, both sides can convey and interpret the information of their development to the group they represent.

There are many misunderstandings between nations and nationals.

Chinese culture is far away from the western world, but people need to understand China and need to give feedback to each other's important positions.

There is also a relationship between a country and the West that needs to be repaired in the near future. This is Russia.

Do you think we have entered a long period of cold war?

Obviously, we have entered a period full of misunderstanding and hostility. This problem needs to be squarely faced.

Because if you let the current situation continue to evolve, you will put yourself in a difficult position.

Therefore, the current situation needs to be interrupted, and it remains to be seen whether it will be realized.

So you do not support sanctions, right? Are sanctions too strict?

The sanctions are already there.

There are many other complex factors that will put pressure on countries such as Russia, such as the absolute level of oil prices, which is more likely than sanctions.

At the end of the year, you didn't send employees to Russia, and you didn't have any investment in Russia, but you gave advice to Russia's sovereign wealth fund.

Must this be a delicate role?

In fact, we have investments in Russia, and our portfolio companies operate there.

Of course, we have studied all the sanctions provisions and will not touch or violate them.

At present, we are not looking for new investment opportunities because the investment environment is somewhat hostile.

I have been a member of the Russian Direct Investment Fund (RDIF) and will continue to hold the post.

Besides, I think the overall situation (the relationship between the West and Russia) needs normalization.

Let's talk about the United States again.

The Fed is pulling back from quantitative easing, a stimulus that began in 2008.

Do you think the United States can withdraw from QE in advance? What's the impact on the economy?

I think the main energy of the Fed is not to let the US slide into recession.

Inflation in the United States is almost zero. Under such circumstances, it is hard to expect a substantial increase in interest rates.

I would be very surprised if the United States would raise interest rates to create a high level of inflation.

Many observers believe that Europe needs

In order to avoid long-term stagnation.

Do you agree?

First,

Under the influence of sanctions against Russia, this will reduce the European economy by 0.5 to 0.75 percentage points or more, but quantitative easing will not solve the problem.

In fact, Europe has temporarily lost the market.

Of course, there are other problems in Europe, but from the marginal effect, the role of QE will not be too great.

Private placement has always been a big beneficiary of QE because it needs to refinance debt of portfolio companies to withstand the financial crisis.

If interest rates go up, do you think the living environment of private equity will be more severe?

The private sector has experienced several periods of high interest rates, just like the real estate market.

We find that there is always a way to success.

If

Because of the strong economic performance of the US, it is usually a good time for private placement.

Now, where is the best investment destination?

It depends on asset class.

For example, in the real estate sector, Europe is the best investment destination.

For at least in the continent, from the perspective of confidence, it is still more serious.

To earn hundreds of base points, it is easier to buy real estate in Europe, because banks sell large amounts of assets, and those who need to pay their debts also sell their assets.