Stephen Schwarzman, CEO and Co-Founder of Blackstone speaks during a strategic and policy discussion with CEOs in Washington, DC. Photo: Pool via CNP, Olivier Douliery

Many assumed Trump’s campaign promises of huge projects to rebuild America’s crumbling infrastructure would be bankrolled by government debt and tax-payer money. But the administration’s budget proposal actually cut infrastructure spending, leaving us to wonder whether there is any momentum at all for this important part of his agenda.

Head of both the president’s business advisory council and private-equity firm Blackstone, Stephen Schwarzman, had an answer to our question over the weekend. On Saturday, Blackstone announced plans to create a US$40 billion infrastructure fund to focus on US projects, with US$20 billion coming from Saudi Arabia’s largest sovereign wealth fund.

“Through the equity in this vehicle and additional debt financing, Blackstone expects to invest in more than $100bn of infrastructure projects, principally in the US,” a statement from Blackstone and the Saudi fund said.

Gillian Tett at the Financial Times asks: what should investors make of this? She points out that business leaders’ time spent with the Trump administration is paying off, with Blackstone’s share price surging following the deal. Another lesson is that non-US governments and investors have found that a focus on US infrastructure is an easy way to win points with the president.

But, obviously relying on private resources for infrastructure spending is not going to fly for many projects that can’t generate revenue, and for Trump’s vision of a US$1 trillion infrastructure push to materialize, the budget will have to be changed to reflect that priority — if it truly is one.

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