Why Blackstone Group LP May Have Further To Fall
Keuka Capital • 74 Comments
Keuka Capital • 74 Comments
Why Owning Blackstone Group LP Is A Risky Proposition
Keuka Capital • 107 Comments
Keuka Capital • 107 Comments
Mar. 16, 2015, 12:42 PM
- Among those considering a bid for the business - which owns five resorts in the U.K. - are Formula One owner CVC and Singapore's sovereign wealth fund. The valuation lies somewhere in the area of £2.5B.
- Should a private sale not be worked out, an IPO in H2 is a possibility.
- Blackstone (NYSE:BX) acquired Center Parcs in 2006 for £1.1B.
- Source: FT
- Previously: Blackstone launches dual-track sale process for Center Parcs (Jan. 27)
Mar. 16, 2015, 7:30 AM
- As rumored ten days ago, Blackstone (NYSE:BX) will pay the highest price ever for a U.S. skyscraper outside of NYC, agreeing to purchase the old Sears Tower in Chicago - now renamed the Willis Tower - for $1.3B. Earlier reports suggested a price in the area of $1.5B.
- Hoping "to really make this more of a comprehensive tourist attraction," says Blackstone real estate chief Jonathan Gray, the company will invest heavily in the retail portion of the building and in upgrading the observation deck.
- The purchase may officially end what has been a multi-year distressed real estate binge cycle. The previous owners purchased the building in 2004 for $841M. Blackstone - of late - isn't used to paying more than the previous sales price. "There's not much in the way distress left," says Gray.
- Source: WSJ
- Previously: Report: Blackstone near ~$1.5B deal to buy Willis Tower (March 6)
Mar. 10, 2015, 9:04 AM
- The Weather Channel went dark on Verizon (NYSE:VZ) FiOS stations today as carriage agreements expired without renewal. Verizon has placed AccuWeather Network content on the stations where TWC lived.
- It's not the first showdown for the Weather Channel, owned in part by NBCUniversal (NASDAQ:CMCSA) along with Bain Capital and Blackstone (NYSE:BX). A year ago the channel took a few months' hiatus from DirecTV over a carriage fee dispute and returned thanks to Hilton Hotels' insistence.
- The channel has a bit of weight to throw around -- it's tops on the Nielsen list of national networks, with 97.1M subscribers.
- Verizon shares are down 0.7% premarket.
Mar. 6, 2015, 6:01 PM
- Crain's Chicago Business reports Blackstone (NYSE:BX) has "a preliminary agreement to pay almost $1.5 billion" to buy Willis Tower (once known as Sears Tower). The price is equal to nearly $400/sq. foot for the Chicago landmark's 3.8M sq. feet of office space, and well above the $840M paid by Willis' current owners in 2004.
- The paper notes Willis Tower generates revenue not only from its office space, but also from its 103rd-floor Skydeck, retail/restaurant space, and broadcast space/antennas, as well as the sale of its naming rights to tenant Willis Group. Property broker Eastdil, hired to find a buyer for the tower, argues a new owner could generate extra naming rights revenue - Willis pays a below-market $1M/year - and also from selling Skydeck naming rights.
- In February, Blackstone struck a deal with RXR Realty to buy a ~50% stake in 6 NYC-area office buildings collectively valued at $4B.
Feb. 25, 2015, 11:17 AM
- “I don’t know why Warren Buffett should be the only person who can have a 15-year, 14% sort of return horizon,” says Blackstone's (BX -0.3%) Joe Baratta, head of private-equity at the firm.
- Blackstone typically cashes out of deals relatively quickly and targets lower returns, but it is exploring ways of partnering with investors for longer-term deals outside of its investment funds, with potentially higher returns (it's not the only P-E firm doing so).
- TPG co-founder Jim Coulter says the P-E industry is in a period of "titanic shifts," and the share of companies purchased through fund structures is likely to fall.
- One model is that of 3G Capital's $23B purchase of Heinz in which the P-E player didn't use a fund, and invited Berkshire as a partner. The two are under no time pressure to sell.
- "It opens up a whole universe of opportunities that we're not currently accessing," says Blackstone's Baratta.
Feb. 23, 2015, 7:17 PM
- The smart money is moving into oil, as bargain hunting P-E firms flock to snap up assets that are now in jeopardy because of lower oil prices.
- Blackstone (NYSE:BX) has gathered $4.5B for a second energy focused fund, which will bring its total ammunition for energy investments to $9B, and Blackstone Energy Partners CEO David Foley says the firm has an eye for everything from start-ups and leveraged buyouts of big public companies to investing in distressed assets.
- The $9B more than doubles the $4B war chest built last year by Warburg Pincus and easily exceeds funds raised recently by big energy-focused firms such as EnCap Investments, Riverstone and NGP Energy.
- 24/7's Jon Ogg wonders if the move indicates a bottom in oil prices.
Feb. 13, 2015, 2:29 PM
- Following on a $500M commitment to fund development for Linn Energy, Blackstone's (NYSE:BX) alternative-asset manager GSO Capital Partners is reportedly assembling a $2B fund strictly for energy.
- We expect a number of transactions to happen in the next three months," says GSO's Dwight Scott. "And it's all about liquidity.
- It may be a sign of the times in private equity as the energy sector's bonds slump.
- GSO last week put a large order for CrownRock's $350M high-yield bond -- which came with a 7.75% coupon and yield of 8%, vs. the 6.2% yield-to-worst on Barclays' High Yield Index. And this week GSO joined with Magnetar to get $300M of secured commitments to Jones Energy (NYSE:JONE).
- Related: Jones Energy, Inc. Announces Pricing of $50 Million Registered Direct Offering
- Related: Jones Energy, Inc. Announces $250 Million Private Placement of Senior Notes from Strategic Investors
Feb. 11, 2015, 2:56 PM
- Maybe noted more for selling than buying of late, Blackstone (BX -0.1%) is close to buying a 50% stake in a six-building NYC office portfolio which would value the properties at $4B, reports the WSJ.
- The seller is RXR Realty whose investors are interested in pulling some of their capital out of the assets. Blackstone is making the purchase through its new "core plus" fund which has amassed more than $3.5B in assets since its launch last year.
Feb. 10, 2015, 3:39 PM
- Missed payments are on the rise, loan maturities are being stretched, lending standards are weakening, and losses on auto-loan backed ABS are on the rise, but that's just part of the problem, writes John Carney.
- Auto financing has caught the eye of regulators at the state and federal level, and if the mortgage-lending probes taught us anything, it's that early-on, most forecasts significantly underestimated the costs of settling these investigations. In addition to the fines, there's the cost to lenders of repurchasing soured loans.
- Want more? The DOJ is getting even more aggressive. It settled for money in the mortgage cases, but in the currently ongoing forex probes, Justice has let it be known that criminal guilty pleas will be required.
- Leaning against such ill winds: The size of the auto market is just a fraction of the mortgage market, and - unlike a lot of mortgage debt - auto loans performed well even during the financial crisis.
- Watching with interest: Santander Consumer (SC +1.9%), Ally Financial (ALLY +2.2%), and Blackstone (BX +1.4%) - whose Exeter arm stood among the top 3 in issuance of subprime auto-loan ABS just year.
Feb. 10, 2015, 7:24 AM
- Blackstone (NYSE:BX) purchased the company - which makes materials used in products ranging from diapers to disinfectant wipes - in 2010 for $326.2M.
- Not specified in the prospectus is how much money the company expects to raise (a placeholder $100M is in there), nor at what valuation.
- PGI's net loss was $97.05M in the nine months ending Sept. 27. Net sales were $1.51B.
Feb. 2, 2015, 3:10 AM
- Holcim (OTCPK:HCMLY) and Lafarge (OTCPK:LFRGY) have moved a step closer toward obtaining regulatory approval for their merger after the two confirmed plans to sell assets to Irish building supplies group CRH (NYSE:CRH) for $7.34B.
- CRH was a finalist in an auction for the assets, battling in the past few days with a consortium led by Blackstone (NYSE:BX).
- The new company created from Lafarge and Holcim's merger will become the world's biggest cement maker with $44B in annual sales.
- Previously: CRH, Blackstone said to consider purchasing Lafarge-Holcim assets (Jan. 22 2015)
Jan. 29, 2015, 7:50 AM
- Economic net income of $1.446B or $1.25 per share vs. $1.542B and $1.35 one year ago.
- Fee revenue of 715.8M up 10% Y/Y. Performance fees of $1.323B down 22%.
- Private Equity economic income of $702.3M up 95% Y/Y, with performance fees of $754.4M up 55%. Fee-earning AUM of $43.9B up 3%.
- Real Estate economic income of $577.4M down 38% Y/Y, with performance fees of $603.1M down 37%.
- Hedge Fund Solutions of $116.7M down 13%, with performance fees of $11M down 86%.
- "Dry powder" of $46.1B roughly flat from a year ago.
- Conference call at 11 ET
- Previously: Blackstone beats by $0.32, beats on revenue (Jan. 29)
- BX +1.6% premarket
Jan. 29, 2015, 7:10 AM
- Blackstone (NYSE:BX): Q4 ENI of $1.25 beats by $0.32.
- Revenue of $2.14B (-20.4% Y/Y) beats by $330M.
Jan. 28, 2015, 5:30 PM
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Jan. 27, 2015, 12:01 PM
- The U.K. resort operator has been owned by Blackstone (BX) since 2006 and could be worth as much as $3.75B in an IPO or sale, reports the WSJ, though sources caution it's early in the process and the numbers could change.
- Blackstone decided after Christmas to begin a formal sale and this week sent requests for proposals from banks who may want to manage the IPO/sale. Their pitches are expected in mid-February.
- Previously: Blackstone weighs options on Center Parcs ahead of possible IPO (July 31, 2014)
Jan. 27, 2015, 10:35 AM
- “Challenges in energy and credit are likely to damp results,” says BofA's Mike Carrier, who expects the strongest quarter at Blackstone (BX -0.8%) and the weakest at Carlyle Group (CG -0.8%).
- A Bloomberg survey of analysts finds them seeing a 73% Y/Y profit decline at Carlyle, 63% at Apollo Global (APO +0.2%), 60% at KKR (KKR -1.4%), and Blackstone - the most diversified - at just 32%.
- The P-E industry is entering the later stages of a selling cycle which began in 2012 and has made investors a fortune, but now is under pressure to put a whopping $1.2T to work. It should find ample opportunity in the energy sector.
- ETFs: PSP, PEX
Blackstone Group LP is a global alternative asset manager. Its alternative asset management businesses include the management of corporate private equity funds, real estate funds, funds of hedge funds, credit-oriented funds, collateralized loan obligation vehicles and separately managed... More
Industry: Asset Management
Country: United States