(Reuters) -Blackstone plans to invest up to $500 billion in Europe over the next decade, CEO Steve Schwarzman told Bloomberg Television in an interview on Tuesday, underscoring market confidence in the region's prospects.

Schwarzman said Europe represents a "major opportunity" for the world's largest alternative asset manager, which oversees assets worth over $1 trillion.

There has been a surge in investor optimism about the region, driven by European governments' push to increase military spending and revive a sluggish private equity market.

With U.S. President Donald Trump reshaping global alliances and trade policies, Europe is actively pursuing new avenues for economic growth, potentially creating promising investment opportunities for firms such as Blackstone.

The European Union, for example, is ramping up its defense spending to revitalize a sector historically overlooked by private investors.

Since 2020, the U.S. and Canada have attracted 83% of all private equity and venture capital-backed aerospace and defense investment, according to S&P.

Europe is starting to change its approach, "which we think will result in higher growth rates. So this has worked out amazingly well for us," Schwarzman told Bloomberg.

Schwarzman supported Trump in the U.S. presidential election last year, according to a report from Axios. He has long been viewed as an ally of the president.

Trump's whiplash tariffs have, however, prompted several businesses to optimize their supply chains to reduce U.S. exposure.

"The U.S. administration's tariffs - combined with any retaliatory measures from its trading partners - will deliver a supply shock to the U.S. and a demand shock to the rest of the world, including China and Europe," said Blerina Uruçi, chief U.S. economist at T. Rowe Price.

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(Reporting by Ateev Bhandari in Bengaluru; Editing by Shinjini Ganguli)