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Schwarzman Sees US-China Deal, No Sign of US Recession

Stephen Schwarzman has a bullish view almost everywhere he looks.

The chief executive officer of the world’s largest alternative asset manager is confident the U.S. isn’t headed toward a recession any time soon and is certain the nation will strike a trade deal with China, Schwarzman said in a Bloomberg Television interview Thursday. At his firm, Blackstone Group LP, assets have soared and shares surged in pre-market trading after the company announced it would change its corporate structure.

Blackstone raised $43 billion in the first three months of the year and has gathered $126 billion in the past 12 months. Schwarzman likened it to “an out-of-body experience” compared to fundraising when he started the firm in 1985.

His behemoth investment firm reported earlier in the day that assets under management crossed half a trillion for the first time—to $512 billion.

Schwarzman, 72, said that while there will be a trade agreement between China and the U.S., it won’t be done in one deal.

“It’s not going to be an agreement that solves all problems because China’s economic form is different with huge state ownership of certain types of things and subsidies,” he said. “But there are a variety of issues that are very important to the United States that will be addressed. And there’s good will.”

On the U.S. economy, Schwarzman said Blackstone wasn’t seeing any signs of a downturn at companies it owns or invests in. “I don’t know why there was this huge drumbeat” in the fourth quarter, he said.

Schwarzman noted a potential headwind for investors: The number of public companies has been shrinking, which changes the landscape for potential deal making.

“You don’t want to run out of companies to buy,” he said.

Since Schwarzman established Blackstone, it has expanded from private equity into businesses including real estate, credit and insurance. Blackstone’s stock price has risen about 21 percent this year through Wednesday.

Its current flagship buyout fund will be the largest in the firm’s history. It’s already raised more than $22 billion and is expected to eclipse the industry’s biggest—Apollo Global Management LLC’s $24.7 billion pool—when it wraps up fundraising later this year, Bloomberg has reported.