Blackstone Acquisitions Hedge Global Power Portfolio Risks

Through the acquisitions of companies active in the power sectors of India and the US, US private equity group Blackstone is hedging risks of its global electricity portfolio, by pitting high demand expectations in India against a stable regulatory framework and client base in the US. BMI views Blackstone's investment in US-based Dynegy as a contrarian move and one that is marred with risks, as it is predicated on the expectation that natural gas prices will rise. This is contrary to BMI's core view that supply fundamentals will put sustained downward pressure on natural gas prices in the next five years.

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