*

Blackstone's global wealth assets have grown to $250

billion

*

Private equity firm appoints COO in Europe to help drive

growth

*

Wealthy have been leaving UK since Brexit - executive

By Iain Withers

LONDON, Nov 4 (Reuters) - Blackstone's private

wealth business plans to enter at least two new European markets

next year to tap growing demand among the well-off, two

executives at the company told Reuters.

New York-based Blackstone has made attracting funds from

wealthy individuals a key priority amid choppy market conditions

and as private equity firms look to diversify their client base

away from institutional clients.

Blackstone's European wealth business currently has offices

in London, Paris, Zurich, Milan and Frankfurt. It declined to

say which new markets it would enter.

Blackstone's wealth products have a minimum investment

threshold of $10,000 to $25,000.

The business has grown its private wealth assets globally to

around $250 billion currently from $103 billion in 2020, or 23%

of Blackstone's total $1.1 trillion in assets. Blackstone

declined to say the value of its wealth assets in Europe.

Navigating the fragmented European market and its myriad of

regulatory regimes has posed challenges. France and Italy have

been Blackstone's biggest growth markets in wealth, with Britain

slower going, the executives said.

"This is not the United States of Europe. There's much more

complexity, and I think understands that," said

Rashmi Madan, head of Europe, Middle East and Africa (EMEA) in

Blackstone's private wealth solutions group.

But regulatory changes across Europe - including in Britain

- to encourage retail investing in private markets were a

"positive sign", Madan said. "There's a growing change in

Europe... that long-term investing is important."

Britain is a core market for the wealth business, despite a

growing number of very well-off people moving elsewhere since

the 2016 Brexit vote, Madan said. She was speaking ahead of

Britain's budget announcement last week, which raised some taxes

on the rich. Blackstone declined to comment on the budget.

To help expand the business, Blackstone has promoted Sheila

Rapple to chief operating officer for EMEA wealth, who relocated

to London from New York in October.

"I think there's massive opportunity," Rapple told Reuters,

referring to Europe.

CASHING OUT

Blackstone is pinning its wealth expansion hopes on a range

of semi-liquid 'evergreen' funds designed for retail investors,

spanning private equity, credit and property. It will launch two

new funds in credit and infrastructure early next year,

initially in the U.S.

Its products are typically sold to wealthy individuals

through partnerships with local banks or wealth managers, such

as French lender BNP Paribas and Italian insurer

Generali.

Buying into private markets exposes retail investors to

illiquid and difficult-to-value assets.

Blackstone limited client withdrawals from its flagship $55

billion 'BREIT' property fund for over a year until February

this year, as investors looked to exit amid a global commercial

real estate slump.

Blackstone's retail funds typically have a one or two-year

'soft lock', where investors can cash out if they pay a penalty

fee, after which they can exit monthly or quarterly, subject to

fund-level caps, Madan said.

That is a signal to investors, she said, "that this is an

illiquid fund and you're effectively investing in private

markets."