Instead of a 2025 IPO boom, Blackstone sees more opportunity to take companies private

• Trump's "unprecedented" tariff negotiations are slowing the economy, said Blackstone chief Steve Schwarzman.
• While M&A dealmaking will slow across the board, president Jon Gray sees the worst impact on IPOs.
• But Blackstone does see an opportunity to maybe buy more public companies as their values sink.

Instead of announcing the arrival of a dealmaking bonanza, Blackstone CEO Steve Schwarzman stressed the importance of "patience" during the firm's earnings call. Schwarzman, who is a Trump donor and was a first-term trade emissary, said that the markets are waiting to see the "outcome of unprecedented multilateral negotiations with perhaps over a hundred countries."

Once this is resolved, Jon Gray, Blackstone's COO and president, said, "underlying momentum" will mean the return of deals.

"You'll see that people want to transact," Gray said. But the IPO market, which has seen a particularly poor few years, is unlikely to be leading the charge.

Right now, financially motivated buyers are "still in the market" and may still be able to transact with the help of a growing base of private credit investors, he said. Strategic buyers, meanwhile, who would use their public equities to buy companies are "a little more cautious."

And the "IPO market, which is the most sensitive to market confidence and conditions, has been the most impacted," Gray said. It has "toughest" conditions, and will need some stability to turn back on.

For a firm that has made some of its most profitable investments during periods of uncertainty, an advantage of private capital that the firm's execs highlighted multiple times on the call is that there's opportunity to buy. That's the case even if sales that would flow to their fund investors are likely to slow.

This has led the firm to increase its purchases of certain public securities, like stocks and bonds, that are potentially mispriced.

"There are opportunities where we think the value of the security may be decoupled on the screen just given the technicals," Gray said.

That same opportunity means that Blackstone could have a chance to take more companies private in 2025 at a favorable price. Last year, the firm took companies like grocery-anchored retail real estate firm Retail Opportunity Investments and software company Smartsheet private.

"Across our different platforms, we're often having discussions with public companies, and when stock prices trade off, the receptivity from boards to our prices may be better," Gray said.

Instead of a year that could have seen more companies try to take their businesses public, 2025 looks like a year where the market will become even more private. For an investor that's betting on an increasingly private economy, with an opportunity to bring retail investors and even 401k into the private markets, there's a chance to benefit.

As long as those tariff negotiations don't drag on too long and bring the whole economy down with them.

"The faster this tariff diplomacy can play out, the better it will be for the economy and markets," Gray said.