The Blackstone Group L.P.NYSE
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
Wed, Oct. 19, 4:08 AM
- Blackstone (NYSE:BX) is the lead bidder to acquire physician-services company Team Health (NYSE:TMH), Reuters reports.
- The agency couldn't say what Blackstone has offered, although Team Health closed +7.2% at $40.25 yesterday, giving it a market cap of $2.93B.
- Blackstone has already owned Team Health before - from 2005-2009 - and its second pursuit of the company comes amid consolidation in the sector.
- Earlier this year, Team Health was forced to make board changes following pressure from activist investors such as Jana Partners.
Wed, Oct. 5, 11:24 AM
- A number of Wall Street names are backing off (or at least slowing) bets on single-family rentals, and there's plenty of talk of rent growth slowing, but Pretium Partners - headed by former Goldman senior partner Donald Mullen - isn't having any of it.
- Source: Ryan Dezember in the WSJ
- We believe tight credit availability is preventing new households from being able to obtain mortgages to purchase their first home,” says Pretium in its latest pitch book. “Households that have been unable to obtain mortgages have become renters, thus driving high occupancy rates and robust rent growth.”
- Pretium is raising money for its third fund dedicated to residential real estate. The first fund raised $1.2B in 2012 and purchased over 16.5K homes; fund two in 2014 raised $900M for 14K non-performing loans.
- With foreclosures down sharply, the company is buying far fewer properties on the courthouse steps, and more on the open market. Pretium acknowledges great deals aren't as easy to find, but still feels it can earn adequate long-term returns by focusing on the right markets.
- A check of some other players finds Blackstone (NYSE:BX) has slowed its buys to about 20 per week. Colony Starwood (NYSE:SFR) sold more homes than it purchased in Q2. American Homes 4 Rent (NYSE:AMH) this week sold a small portfolio of Atlanta-area houses.
- Other parties: SBY, RESI
Tue, Sep. 27, 12:14 PM
- Blackstone BX -1.1% offers euro-denominated senior notes of its indirect subsidiary, Blackstone Holdings Finance Co. L.L.C.
- The Blackstone Group L.P. and its indirect subsidiaries takes fully and unconditionally guarantee of the notes.
- Net proceeds from the notes will be used for general corporate purposes.
Tue, Sep. 27, 11:12 AM
- "For any professional investor, this is the most difficult period we’ve ever experienced,” says Joe Baratta, Blackstone's (NYSE:BX) global head of private equity. “You have historically high multiples of cash flows, low yields. I’ve never seen it in my career. It’s the most treacherous moment.”
- For private-equity players, lofty valuations make it a great time to cash in on investments, but a not-so-great time to redeploy capital into new deals. Not finding a lot of value in large LBOs, Baratta says Blackstone is targeting smaller companies with lower leverage.
- Source: Bloomberg's Devin Banerjee
- Other interested parties: Carlyle Group (NASDAQ:CG), Apollo Global (NYSE:APO), KKR, Fortress Investment (NYSE:FIG)
Wed, Sep. 21, 1:04 PM
- As previously reported, Bayer (OTCPK:BAYRY) aims to jettison its dermatology business in order to help fund its Monsanto buy. Although discussions are in the early phase, there appears to be plenty of interested parties. In addition to skincare-focused players like Allergan (NYSE:AGN), Almirall (OTC:LBTSF) and Nestle (OTCPK:NSRGY)(OTCPK:NSRGF), Teva Pharmaceutical Industries (NASDAQ:TEVA), Perrigo (NASDAQ:PRGO) and Sun Pharma (OTC:SMPQY) are also reportedly in the mix.
- On the institutional investor side, KKR (NYSE:KKR), Nordic Capital, Bain Capital, Blackstone Group (NYSE:BX) and Cinven may also be eyeing the unit which, analysts say, could fetch $1.1B.
- Previously: Bloomberg: Bayer eyes sale of $1.1B dermatology business (Sept. 8)
Tue, Sep. 20, 3:06 PM
- The P-E giant has agreed to buy a portfolio of mostly West Coast logistics centers from LBA Realty for $1.5B, reports the WSJ.
- In the age of Amazon.com logistics is the hottest part of the commercial property sector, with prices for distribution centers and such still on the rise even as those for things like office buildings and malls show signs of cooling.
- "Distribution used to be just another part of the supply chain. Now logistics has moved up in its importance in corporate strategy," says Charles Sullivan of Global Logistics Properties.
- Interested parties (other than BX): Stag Industrial (NYSE:STAG), Prologis (NYSE:PLD), Liberty Property (NYSE:LPT), First Industrial (NYSE:FR), DCT Industrial (NYSE:DCT), Eastgroup (NYSE:EGP), Rexford Industrial (NYSE:REXR), Terreno Realty (NYSE:TRNO), Monmouth (NYSE:MNR), Gramercy Property (NYSE:GPT).
Mon, Sep. 19, 11:00 AM
- "These guys aren’t scared of an empty building,” says JMP Securities' Steve Delaney. "There is a tremendous opportunity and a need for commercial-property owners for more types of financing than the commercial banking industry as a whole is willing to provide.”
- With banking regulators looking over the shoulders of bankers, quick-moving outfits like Blackstone (NYSE:BX), Starwood Property Trust (NYSE:STWD), and Apollo Commercial Real Estate (NYSE:ARI) come to mind as beneficiaries.
- According to Preqin, capital being sought by U.S. private funds for real estate debt as of July was up nearly 40% from the previous year.
- There are "capacity issues when your OCC is staring at you the whole time,” said a no-doubt smiling STWD CEO Barry Sternlicht last month. “We like them to keep staring. That’s fine with us, and we want to be a beneficiary of this climate.”
Wed, Sep. 14, 8:37 AM
- American Electric Power (NYSE:AEP) agrees to sell four power plants totaling ~5,200 MWs for ~$2.17B to a newly formed joint venture of Blackstone (NYSE:BX) and ArcLight Capital Partners, confirming an earlier report.
- The sale includes plants in Cheshire, Waterford and Mount Sterling, Ohio, and Lawrenceburg, Ind.
- AEP, which had announced in January that it was exploring strategic alternatives for the power plants, is making the sale as part of a move away from wholesale power markets and toward its regulated utilities.
- AEP says it is evaluating options and will share details about its plans for investment of the proceeds from the sale at a Nov. 1 analyst day.
Tue, Sep. 13, 4:31 PM
- American Electric Power (NYSE:AEP) is near a deal to sell four Midwest power plants to Blackstone Group (NYSE:BX) and ArcLight Capital Partners for ~$2.1B, WSJ reports.
- The P-E firms would acquire the coal-fired Gavin Power Plant in Cheshire, Ohio, and three natural gas plants in Indiana and Ohio, according to the report.
- Slumping wholesale electricity prices, partly due to weak natural gas prices, have pressured some independent power generators such as the ones AEP is selling.
Wed, Sep. 7, 3:16 AM
- "We think the asset management industry, which was always very fragmented and highly profitable (with low capital intensity), will become much more concentrated over the next five years - especially in U.S. retail with BlackRock (NYSE:BLK) and Vanguard clear winners," Credit Suisse says in a note.
- Firm says it prefers stocks that will exceed net flow/earnings expectations and can maintain or expand valuation levels.
- Top long is AMG, which CS thinks will post much stronger flows in 3Q16, has low exposure to the DOL rule (only 16% of AuM is from U.S. retail and less in retirement), and is one of the cheapest asset managers on cash earnings.
- Also likes LM, which is mainly a valuation and improving earnings visibility play.
- Likes BLK, which is one of the few beneficiaries of the DOL rule (through iShares and Aladdin/Solutions).
- On a longer-term horizon, likes BX (high FE AuM growth + improving cash earnings) and WETF (improving net flows + LT M&A target).
- Says BEN and WDR could both see among the largest net flow impacts from the DOL rule.
Tue, Sep. 6, 2:58 PM
- Sempra Energy's (SRE +1.4%) IEnova Mexican unit said yesterday it agreed to buy two wind farms in northeastern Mexico from a group led by units of Blackstone (BX -0.6%) for $375M.
- IEnova also will assume $477M in debt related to project financing, valuing the transaction at $852M.
- The Ventika I and Ventika II wind farms, which are adjacent to each other in the state of Nuevo León, include 84 wind generators with a combined electricity generation capacity of 252 MW.
- IEnova says the acquisition is part of its plan for short-term and medium-term growth, and will increase its operations in renewable energy.
- Mexican cement maker Cemex (CX +0.4%) will continue to manage the farm, which was completed in December and started operating in April.
Mon, Aug. 29, 7:31 AM
- The Swedish pension fund manager is looking to exit investments not fitting with its strategy, and has found Blackstone (NYSE:BX) as a buyer of its $1.8B in U.S. property, according to Bloomberg.
- The real estate mostly consists of retail and office properties.
- Alecta manages about $85B and earlier this year had hired JLL to sell a portfolio of 48 office, retail, and industrial properties in the U.S. and U.K.
Thu, Aug. 25, 5:47 PM
- Blackstone Group (NYSE:BX) says it will invest ~$1.5B in the Permian Basin in Texas and New Mexico to make strategic acquisitions through two new ventures.
- The P-E firm says it will partner with privately-held Jetta Operating to pursue asset and leasehold acquisitions in the Delaware sub-basin of the Permian, and with start-up Guidon Energy to form a new company focused on the Midland sub-basin of the Permian to purchase an initial acreage position.
Wed, Aug. 17, 4:30 PM
- Blackstone (NYSE:BX) is near a deal to purchase the 894-unit, market-rate Kips Bay Court for $620M, or nearly $700K per unit, according to The Real Deal, which says the sale could go under contract this week. It would be NYC's largest multifamily deal this year.
- According to an offering memorandum, NOI for 2017 is expected to be $23.9M, or a cap rate of 3.85% at the $620M sale price. While nearly 40% of the units are Section 8, the memorandum projects just 69 will remain by 2027.
- A CBRE (NYSE:CBG) team is marketing the property.
- Blackstone also made the largest multifamily buys in NYC in 2015 with the $5.3B Stuyvesant Town purchase and the $690M Caiola portfolio.
Tue, Aug. 16, 2:12 PM
- Blackstone (BX -0.4%) has offered a financing plan to help JDA Software, giving it an alternative option to selling itself to Honeywell (HON -0.3%), Reuters reports.
- BX reportedly has proposed to JDA a payment-in-kind financing deal whose coupon would be paid with additional securities, and would include equity warrants that would give BX a significant minority stake in the company.
- JDA's majority owner, buyout firm New Mountain Capital, now must decide whether to sell the company outright to HON for ~$3B, or stick with it and seek to speed its turnaround with new capital from BX that would allow JDA to invest in its sales force and products, according to the report.
Thu, Aug. 11, 3:16 PM
- Swimming against the tide of post-crisis thought that investors prize the ability to quickly exit investments, Blackstone (NYSE:BX) is looking to raise $5B mostly from retail investors for its first nontraded REIT, writes Lisa Abramowicz.
- In a world of barely visible returns and fancy valuations for most the sorts of things folks can buy and sell with the push of a button, Blackstone is betting investors are ready to trade liquidity for yield.
- The move comes as Finra this year sounded the alarm on the illiquidity of nontraded REITs, and as NTR sales have fallen off of a cliff - July sales of $300M compares to roughly $625M a year earlier, and $1.4B a year before that. Other months in 2016 tell a similar tale.