Private-equity giant Blackstone just hired an Amazon Web Services exec in an effort to scout out tech deals. Christine Feng, a director in corporate development at AWS, joins Blackstone as senior managing director, three months after Blackstone poached another tech-focused dealmaker, Vini Letteri, from KKR. Both staff the firm's San Francisco office. Blackstone's head of tactical opportunities, Chris James, laid out why the firm is doubling down on tech, an area that's proven resilient throughout the pandemic. Visit Business Insider's homepage for more stories.
Private-equity giant The Blackstone Group has hired a dealmaker from Amazon Web Services to scout out tech opportunities in Northern California, in a sign that Wall Street's large investors are looking to better compete in an area traditionally dominated by specialty players.
Of all the industries that have been slammed by the pandemic, tech is one that's stayed relatively resilient, and private-equity executives have told Business Insider to expect to see a greater focus on investing there, specifically in software companies.
Chris James, the head of Blackstone's tactical opportunities group — a unit designed to quickly deploy capital in special situations — shared with Business Insider that the firm has brought onboard Christine Feng, a director in corporate development at AWS who previously worked in a similar role at Microsoft.
"We are aggressively growing our Northern California presence," said James, calling Feng a "key anchor."
At AWS, Feng was responsible for mergers and acquisitions, from sourcing to execution. And at Microsoft, where she worked between 2010 and 2016, she held another dealmaking position as a senior member of its corporate development team, executing acquisitions and divestitures across all of Microsoft's business units, according to her biography.
James said that Blackstone had approved the position toward the end of last year, pre-COVID, and that the firm had sought to add an executive with expertise and relationships in the tech community, which could translate to deal origination and execution.
"Needless to say, the tech sector is quite broad and growing and there is nothing that is not touched by technology," James said.
"We are trying to do deals — and a lot of those deals, at their core, touch on technology."
Some of the deals that have marked Blackstone's expansion in the tech sector include its investment in dating app Bumble owner MagicLab, as well as the financial-data company Refinitiv, which announced plans to merge with with the London Stock Exchange last year.
Read more: We talked to a dozen insiders about Jon Korngold, the investor driving Blackstone's big push into backing fast-growing companies like Bumble
But Blackstone, with more than $560 billion in assets under management, is best known for its real-estate, credit and general private-equity investing, with portfolio companies spanning hotels, parks, and warehouse storage. Historically, the most prominent tech investors have been specialty players, like Silver Lake, Vista Equity Partners and Providence Equity Partners.
Other recent tech investments from Blackstone include Ultimate Software, a cloud-based human resources applications developer, HealthEdge, administrative software for health insurers, mobile ad company Vungle and 21Vianet, a data-center services firm.
"Digital infrastructure is a big theme for us in tac opps," said James.
"We have done a couple of data center and fiber deals, all of which are the underpinnings of this data revolution and people's demand for better information."
By expanding in the area, Blackstone joins other large investors in the pursuit of tech assets at a time when digital operations seem to be among the wisest bets, as the pandemic clouds the financial prospects of physical, in-person businesses.
The Carlyle Group, for instance, is another large firm that has been active in tech lately, having taken data company ZoomInfo public last month, raising $935 million, and selling off Eggplant, a provider of AI software, to Keysight Technologies.
As for Blackstone, its size will be a key part of the pitch.
"We want to be able to go to companies and say listen, we have capital and we have a lot of resources. That capital can come in the form of credit, structured equity, we can buy you out completely or do a minority deal. We have it in all shapes and sizes," said James.
In joining Blackstone, Feng will work across the firm's tactical opportunities and credit divisions. She will be based out of San Francisco, and is coming aboard just three months after the firm added another tech-focused dealmaker in the region: Vincent Letteri, who joined from KKR in May. Previously, Letteri had worked on operations at KKR portfolio company First Data.
"We want her opinion and feedback and bringing that tech perspective," said James, "Telling us, how would Amazon Web Services, Microsoft or Google think about this company or trend?"
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