strategic investment from the Chinese government looks cannier by the day. It raised an extra $3bn for the private equity group when it went public, which went towards providing a bigger pile of cash for its founders and capital for future growth. It added a long-term strategic investor that has forgone voting rights – let alone board representation – for its 10 per cent stake. It also, potentially, gives Blackstone a new core investor when raising new investment funds.

Will it also help Blackstone do deals in China? The country could throw up serious private equity investment opportunities and Blackstone has been late to the game, opening its Hong Kong office only this year. In the short term, getting rubber-stamped by the government should give Blackstone some competitive edge. And Beijing will presumably want its investment in the buy-out group to do as well as possible.

But Blackstone investors should not expect the strategic stake to open the floodgates. The government is no joined-up entity and Blackstone will still have to pick its way through China's various interest groups to get deals done. Also, like China's heavy purchases of US Treasury bonds that have helped to keep down interest rates in the short-term, Blackstone's “coup” could have a sting in the tail. Being close to the government could crimp Blackstone's room for manoeuvre in the future when, say, trying to lay off Chinese workers. Alternatively, the government could try to push Blackstone into specific deals it wants done.

Finally, there is the overall market that Blackstone will have to contend with. Competition for assets is increasing from overseas as well as Chinese private equity groups. Meanwhile, sellers are getting more sophisticated and demanding higher prices – particularly as they see the prices being paid by public market investors. With companies on the Shanghai stock exchange trading on 40 times earnings, private equity presumably has its work cut out to find cheap opportunities

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