Blackstone Group LP's stock plummeted 5.00% during intraday trading on Thursday, marking a significant decline for the alternative asset manager.

The sharp drop appears linked to investor apprehension regarding Blackstone's potential investment in Hong Kong's New World Development. According to a Reuters Breakingviews analysis, Blackstone is in advanced talks to become the single largest shareholder of the distressed property group, which would require an investment of approximately $1 billion. New World Development trades at an 86% discount to its net asset value and faces $3.7 billion in debt maturing over the next 24 months.

Analysts highlight the risks of Blackstone taking a minority stake in a publicly listed, family-run company where the founding Cheng family retains significant influence. Investor unease with New World's governance model and its recent brush with default are seen as key factors that could make this a challenging investment for Blackstone, potentially explaining the market's negative reaction.