After US, India is the easiest place to list a company, says Blackstone's chief operating officer Jonathan Gray

India is the best performing market for Blackstone, chief operating officer Jonathan Gray told Sruthijith KK in an interview. The world’s largest alternative asset manager aims to double its investment in India to $100 billion, he said, adding that the sentiment on the country is still positive. Edited excerpts:

From your perch, what are two causes for concern about the global economy and two for optimism?
Obviously the wars in Russia, Ukraine, as well as West Asia, which are causing commodity prices to go up. Agricultural prices are impacted, and that has pushed central banks… part of the reason they’ve had to move to raise rates as opposed to lowering. That ties to my second concern–the rising cost of capital. Interest rates around the world are going up. We’ve seen 10-year treasuries in the US go up by 80 bps in the third quarter. In Europe, we’ve seen a pretty significant rise, particularly in France. This is really a combination of the war, or the wars, and the inflation caused by that, as well as concerns around government deficits.


Also Read: Blackstone has $100-billion plans for India in 5 years, says COO Jonathan Gray
Add to the mix this huge AI capex build and what that is doing in terms of demand for capital. All of that will likely lead to multiples coming down a bit for assets. That’s the major impact.
On the positive side, I would say two things. One is we still see a lot of economic momentum. In the US, very strong revenue growth at our companies. In India, strong revenue growth. The second thing is AI diffusing into the economy, and the productivity we’re beginning to see at our companies, which is pretty remarkable.

On the AI infrastructure build-out, is this investment sustainable? McKinsey’s State of the AI report earlier this year said adoption is deepening, but enterprise returns are flatlining. We’re also seeing some concern with AI debt…

Whenever you have a large innovation and then capital flowing towards it, there’s a risk that things go out of kilter. First off, the demand is just continuing to grow, and I would say at our companies, the returns on investment seem remarkable. They’re finding new ways to use this technology. We have a garage door opening company that’s using AI visualisation tools to recognise when the package is coming from Amazon, then automatically opening the door. They’ve created a $50 million business that they think will be a $500 million business.

We’re finding use cases in legal and accounting and all these different areas, and our teams at times can find it difficult to get this deployed, to get the technology right. If you think about a classic bubble–telecom infrastructure in the 90s–the supply was built with leverage well in advance of the demand. It turned out to be excessive, and ultimately there were a lot of losses.

In this case, most of this is being built out by the biggest companies in the world who have very healthy balance sheets. What we’re seeing is demand is running ahead of supply, and the supply of compute is constrained by getting entitlements, getting a power plant, getting turbines, getting chips, amassing capital. We have a fundamental shortage of compute, and that is supporting the value. Most of this is now being contracted by very large companies such as Microsoft, Amazon, Google.

How does the firm view the Indian economy in the medium and long term?
Start with the short term. Obviously, there’s been some negativity because the wars have driven up energy costs. There’s been some pressure on IT services valuations with concerns about AI disruption and the market was trading at a very high multiple here. We’ve seen the sentiment in India, people have gotten overly negative, (but) when you look at the medium and longer term, you’ve got an economy that’s growing at 7%-plus, a very young population.

There’s a lot of things that give India an edge over time, and I see it as the fastestgrowing major economy for many decades to come. As an investor with a long-term perspective, we say this is actually a pretty good moment. As the market’s pulled back, that creates a better entry point for us. We take a long-term view. I remember back after the financial crisis, most investors were saying, “Oh, India, gosh, I don’t wanna do that.” We stuck through it. That turned out to be the right decision. This is nothing like that. But again, if you look at the long-term fundamentals of this economy–the rising middle class, the opportunities that will create, India’s opportunity to be more of a manufacturing powerhouse globally–there are a lot of interesting places to deploy capital.

You mentioned IT services and pressure on the sector. How do you see that playing out?
I think these IT services companies are much more adaptable than people realise. They’ve moved from just providing services to be AI deployment companies. If you think about most enterprises, it’s not like I could hand you Claude code or Codex and say, “Change your business. Make your company different.”

You need a partner to come in and say, “This is how you’re going to change your workflow. This is how you’re going to do your financial reporting.” India, given its strength in IT services, is a natural to help bridge this world. I also think there’s a big opportunity in India in the infrastructure we were talking about earlier. We’ve got AirTrunk here to do hopefully sizeable things in the data centre space. We invested in Neysa, which is a neo cloud.

Blackstone has had a tremendous run in India–you have $50 billion deployed here. What has helped you succeed?
Well, it starts with the people. Amit Dixit, who runs our private equity business, Tuhin Parekh, who runs our real estate business, have been with us now for several decades. They’ve really been builders of businesses. They’ve started with things that are very small or started from scratch.
They’ve decided to start with something small, add capacity to it, maybe do additional acquisitions, put in place world-class management teams, ultimately take these businesses public. We’ve taken 14 companies public in India, five of the six REITs. We helped create the REIT rules here, working with this government that’s done such a good job.

What can you tell us about Blackstone’s road map in terms of investments?
It will definitely be playing this rising middle class. People are going to travel more. They’re going to consume more financial services. Healthcare certainly is going to be high on their list. We’re developing housing. We’ve invested in financial institutions who finance housing. All the things that happen as you move from a country with a very low GDP per capita, and many of those people move up, they’re going to want to consume. Providing those services is really important. I think this AI build-out is critically important. I think energy, which is an area India’s made a lot of progress in.
The Prime Minister talked about progress in the solar space. I think renewables are very exciting. The digital infrastructure, the data centres and compute are really important.

You have $50 billion invested in India. How much would you like that figure to be?
In five years, we’d love that number to be $100 billion. Now we’ve got to find great businesses. It could be in private equity, could be in real estate. We're going to be expanding here in infrastructure. We're looking to expand in credit. I think growth equity is an opportunity. I think there's more we can do in more sectors. As the Indian market grows, it really works well for our business. People in India don’t fully appreciate just how strong your capital markets have become. The stock market’s up five and a half times in the last 20 years. It is probably, after the US, the easiest place to list a company, and that is very good for foreign capital because when you think about investing money, and in particular our drawdown funds, we’ve got to send the capital back to our investors. So the fact that India has a robust public market is very helpful. It’s another reason we have a lot of confidence here.
In August, we sold more than a billion dollars of stock in a company, Knowledge Realty. To do a billion-dollar secondary speaks of the scale of this market, that there is real liquidity, and that is definitely helping our investors. It’s helping investments here. And so even as the stock market has pulled back here, the liquidity has really been maintained. And again, I think the government is continuing to make the market easier to access, yes, for foreign investors.

There is some concern that we’re seeing in terms of public markets in India. In 2026 alone, foreign portfolio investors have pulled out $37 billion...
Public market investors can be fickle. There was a simple narrative last year, which is that India is an importer of a lot of energy, and energy costs are going up, and that made investors cautious. India has exposure to IT services—AI’s coming. Simple narratives get established and then as money comes out, the market obviously has underperformed. But the public market can fall back into love again too. If the earnings growth, which I think is expected this quarter to be mid-teens, continues, the revenue and earnings growth, then you’ll see global investors come back.

When you market your own funds and products to your LPs, are you facing any pushback? What is the sentiment about India like among global investors?
The sentiment is still fairly positive. Global investors recognise there aren’t that many global firms who have boots on the ground who are capable of executing at scale. They want exposure to private market assets in India, but there’s a relatively small number of firms who can access it. The currency depreciation has been the other headwind for global investors. That’s probably the biggest question we get about India. But I think there’s increasingly more and more belief that this story has real legs.

You’re significantly invested in software services, data centres, AI infrastructure, healthcare. Any other sectors or themes that have caught your fancy?
Well, definitely travel, the hotel business. We invested in a visa processing business, VFS. We think foreign travelers are going to come to India more and more, particularly as the infrastructure improves. The airports here- –most people who come to India for the first time are shocked when they see the first-class nature of the airports now. As the roadways get better, travel is an area. Definitely energy in every form that you can come by. And, manufacturing will continue to be important.

Financial services certainly, because you have an economy where you’re just starting to get people into markets. More and more people, as they get wealth, are going to look to invest, save, buy a house.

You’ve taken a minority position in Federal Bank. We’ve been hearing murmurs about other Blackstone deals in the financial services space. Is that an area you’re beginning to get excited about?
For sure. We’ve had success with Aadhar in the home lending business, ASK in the wealth management business. I just think that’s a natural part when you get this sort of increasing GDP, increasing wealth. Financial services are something that people begin to access. The banking system, the stock market, there- ’ll be all sorts of things. The insurance industry offers opportunities as well.

Between Blackstone, KKR, Bain, Brookfield and EQT, some $50 billion have been raised for Asia funds. Typically, a third of that tends to come to India. Are there enough quality companies and scale opportunities to absorb so much capital?
The Indian economy is now over $4 trillion. The stock market is over $5 trillion. When you think about those as the denominator, as the potential pool of investable assets, this is a place that can absorb a fair amount of capital, certainly relative to the amount of money raised in other parts of the world. I would say we are constantly pushing our teams to find new things here, but we haven’t found that we’ve had to compromise the bar.

Globally, private credit has had a few challenges over the last few years. Are you seeing challenges ease up?
What’s interesting is there was all this noise around private credit, and yet we haven’t seen what these sort of town criers of private credit doom were predicting, which was mass defaults and all these issues. Had they come out and said, “You know, you were operating in an environment two or three years ago where rates were really elevated, spreads were high, and there were no losses, and returns we think are going to come down a bit,” that would’ve been a very credible criticism. Instead, you’ve got a lot of noise and it led investors to say, “Whoa, I’m concerned” and it led to redemptions. I think the reality will be different, and we’ll see that wave ebb.

I think there was some moderation in returns. But these products are remarkably resilient because they’re generally lowly leveraged, and they made low loan-to-value loans themselves. You’ll continue to see private credit, both on the investment and non-investment grade side, continue to take a lot of share.

You love running in New York’s Central Park. Do you plan to run in India?
Yes, I do plan on running in India. When you’re traveling the world, there’s no better way to see a place than to do it on foot. Right? And so, to wake up in Delhi or Mumbai or Tokyo or Brussels or wherever you are in the world, that to me is always a nice thing to do, run along the water somewhere