Private equity giants compete with banks

Cost-cutting advice for companies, central purchasing units, health cover for employees... The heavyweights of private equity have enough to compete with traditional bank financing. Among them is Blackstone, the sector's number-one giant.


A la carte services for companies

The big funds have no shortage of resources when it comes to taking on the banks. Aware that simple credit is no longer enough, some players are promoting additional services.

Blackstone offers an "Advantage" program to corporate borrowers. This program includes a range of additional services that are not invoiced. Winoa, a leader in the production and sale of steel shot, specializing in the treatment and processing of metal surfaces, has been financed since 2017 by the American investment fund. The company has been able to benefit from consulting services in cybersecurity, freight cost reductions, telecoms, IT or energy. This has enabled it to reduce its CO2 emissions by 12%.

Blackstone negotiates discounts on health insurance and employee benefits for its US-based clients. In this way, the Group saved an industrial company $300,000 on the cost of these services. During the health crisis, Blackstone also took the initiative of providing employees with personal protective equipment.

Alliances between funds and banks

While some funds prefer to differentiate themselves from banks by broadening their range of services, others have decided to join forces with them. Such is the case of Apollo, which has forged a strategic partnership with BNP Paribas, Europe's leading bank in terms of activity and profitability, with the aim of creating a dynamic platform for working capital and supply chain solutions. Called Eliant, the platform provides companies with strategic inventory capital solutions to help them optimize their supply chains and balance sheets.

More specifically, BNP Paribas provides Eliant with debt and receivables financing, as well as structuring and guidance advisory services, while Apollo acts as investment manager supporting an in-house Eliant team. The entity began by tackling the semiconductor sector, with $1.3 billion in commitments signed with buyers.

" By joining forces, we create scale effects to finance larger transactions," reports Suresh Subramanian, head of treasury and international trade solutions at BNP Paribas for the US, to Les Echos newspaper.

Given their success with corporate clients, private equity players are no longer hesitating to extend their services to individuals. Apollo recently acquired Griffin, a network and asset manager working with high net worth individuals, and has just launched a $1 billion fund accessible only to private individuals. For its part, Blackstone has also created a fund dedicated to high-net-worth individuals in the US, as well as the UK and Switzerland, with a gross annual income of $70,000 and assets of the same order. These announcements demonstrate the ability of the major funds to compete with the banks.