In the News April 15
Economic Matters of Concern
Quebec Institutions’ Partnership with Blackstone Hedge Fund
A recent article published in the Journal de Montréal gives a glimpse of the extent to which a hedge fund, in this case Blackstone, is “spreading its tentacles” to all corners of Quebec and how it seems nothing “will appease its appetite.” Blackstone has assets of over $730 billion and its CEO, Stephen Schwarzman, is said to be one of the richest men in the United States.
Blackstone played a first-rate role in renegotiating free-trade with the United States and Mexico. The article points out that in 2017, Schwarzman — who is said to have had close ties to Trump — came to Canada to meet with then Quebec Premier Philippe Couillard and Prime Minister Justin Trudeau. He claimed later in a publication that he was the one who convinced Trudeau to make concessions to the milk industry, whose main producers are in Quebec.
Former Prime Minister Brian Mulroney has been on the hedge fund’s board of directors since 2007. Blackstone claims that Mulroney provides a better understanding of “economic and trade related issues.” In 2019, another member of the Blackstone board of directors, billionaire Jim Bryer, met with Quebec Premier François Legault and Quebec’s Minister of the Economy Pierre Fitzgibbon to present the liquified natural gas project, led by GNL Québec.
The article points out that there are close ties between Blackstone and Quebec’s Caisse de dépôt et de placement (CDP), identifying Blackstone as CDP’s most important “partner” in the private investment and real estate sectors. In 2020, the CDP held $4.4 billion in investments in 25 of the company’s funds, which was 13 per cent higher than two years earlier. The real estate subsidiary of the institution, Ivanhoé Cambridge, has conducted transactions with Blackstone, one of which was the purchase of an immense residential complex in New York for the sum of $7.1 billion as well as the acquisition of the Vancouver firm PIRET (Pure Industrial Real Estate Trust) for $3.8 billion.
In terms of real estate in Quebec, Blackstone is said to be “on the offensive.” Along with Canderel and Mach, Blackstone participated in the buyout of assets belonging to the Quebec enterprise Cominar, for a record $5.7 billion. Blackstone has thereby laid their hands on 190 buildings in Quebec.
Blackstone also made a breakthrough in the “Canadian retirement home sector” with its investment in Groupe Sélection, a Quebec company, involved in 13 retirement homes. It has acquired three ex-Papiers Rolland plants, is in partnership with Hydro-Québec for the electricity export contract to New York, and has invested $3 billion in Invenergy, a U.S. renewable energy company of which the CDP is the main shareholder.
Blackstone has established two of its main operations in Quebec: Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. Many of Blackstone’s investments have been made through these Quebec entities, including Paysafe and Falcon Minerals, a U.S. oil company.
On the question of Hydro-Québec and its historic and lucrative contract with the city of New York, the article points out that in its 2021 call for proposals, Hydro-Québec chose Blackstone. As for the agreement on transportation costs, a spokesperson for the state-owned enterprise is quoted as saying that remains confidential because of the sensitive trade information involved.
Still, according to government sources, Blackstone will receive close to $10 billion in revenue over a 25-year period — one-third of the $30 billion global contract.
1. “Le #1 mondial a les yeux rivés sur le Québec,” by Olivier Bourque and Sylvain Laroque, Journal de Montréal, January 22, 2022.
(Translated from the original French by TML.)
Workers’ Forum, posted April 15, 2022.