Nov. 4, 2014, 3:00 AM
- Singapore’s Government Investment Corp is leading a consortium to purchase Blackstone's (NYSE:BX) IndCor for about $8B including debt.
- IndCor was formed in 2010 as a portfolio company of Blackstone and has a footprint of warehouses and distribution centers across the U.S.
- IndCor announced in September that it had filed with the SEC for an IPO.
Oct. 29, 2014, 10:05 AM
- At issue, reports Reuters, are how net returns - also known as net IRR - are reported in private equity firms' marketing materials. Typically, net IRR deducts investors' fees and expenses, but P-E fees are not standard, and different investors pay different amounts.
- By including the general partner's money in the calculation - they don't pay any fees - the performance figures would be inflated, and the SEC is investigating whether this is being properly disclosed.
- The SEC has already been looking under the hood of the P-E industry - mostly regarding fees - but the emphasis into these performance figures signals a new phase in the probe.
- A Reuters review finds Blackstone (BX +0.2%), Carlyle Group (CG -0.3%) - for example - do not include money coming from general partners in their IRR calculations, but Apollo Global (APO +0.1%) does.
- ETFs: PSP, PEX
Oct. 28, 2014, 1:49 AM
- Blackstone (NYSE:BX) is looking to raise around $13B for its next flagship global real estate fund, in line with its predecessor fund, Blackstone Real Estate Partners VII, which raised $13.4B in 2012.
- The P-E firm has already started preliminary conversations with potential investors about the new fund and expects marketing documents to be ready in the next few weeks.
- Blackstone derived 45% of its earnings from real estate in the first nine months of 2014.
Oct. 21, 2014, 9:22 AM
- The former management team of Solops, LLC partners with Blackstone (NYSE:BX) to create Onyx Renewable Partners, which will be owned by funds managed by Blackstone.
- Onyx's primary focus will be to develop, finance, construct, and operate utility-scale wind and solar projects in North America.
- Leading the management team is Solops founder and CEO Matthew Rosenblum, and over the past three years his crew collectively managed the development of more than 100MW of new renewable projects.
- Source: Press Release
Oct. 20, 2014, 7:46 AM
- The sale of 71 properties totaling about 11.3M square feet over 25 states to DDR and Blackstone (NYSE:BX) will results in net proceeds of roughly $1.34B to ARCP that will be used to pay down the company credit line.
- The company also announces a LOI with another party to sell five multi-tenant properties for $52.8M, and it's expected to close before year-end.
- Source: Press Release
- Previously: American Realty inks agreement to sell shopping centers
Oct. 19, 2014, 10:08 AM
- Remember last summer's private-equity legal settlements which ensnared sector names like Carlyle Group (NASDAQ:CG), Blackstone (NYSE:BX), KKR, and the P-E arm of Goldman Sachs (NYSE:GS) for colluding to keep a lid on the prices of buyout targets? Needless to say, management didn't bear the burden of the settlement penalties, but neither did the shareholders. In the case of Carlyle at least, the $115M fine was shouldered by the investors in one of its buyout funds.
- Those investors include state and city workers and retirees from across the country, and chances are they were unaware they were responsible for these costs due to the highly secretive nature of the agreements made between P-E and the pension funds which invest in them.
- Disclosure "would cause substantial competitive harm," says a Carlyle spokesman. “This is an overreach on Carlyle’s part, and frankly it violates the spirit of the indemnification clause of our contract,” says NYC Comptroller Scott Stringer, who oversees three city pension funds invested in that particular Carlyle vehicle.
- Private-equity firms now manage $3.5T in assets, and pension funds have been among the more willing investors, with 10% of their assets - or $260B - in P-E. Yet the terms of their deals - including what they're paying to take part - are hidden from view despite open-records laws demanding just the opposite.
- “Hundreds of billions of public pension dollars have essentially been moved into secrecy accounts,” says former SEC lawyer Edward Siedle. "It’s very damning legal boilerplate that sums up the fact that they are the highest-risk, highest-fee products ever devised by Wall Street.”
- ETFs: PSP, PEX
Oct. 16, 2014, 9:47 AM
- A previous spinoff didn't do too badly, says Blackstone (BX -4.8%) President Tony James, speaking on the company earnings call about the planned spinoff of the P-E firm's advisory business. The "previous spinoff?" BlackRock.
- Paul Taubman - who will head the advisory operation post-spin - is a "rock star investment banker," says James.
- Webcast and presentation
- Previously: Blackstone misses by $0.06, beats on revenue
Oct. 16, 2014, 9:13 AM
Oct. 16, 2014, 8:15 AM
- Q3 economic net income of $758M or $0.66 per share grew 18% from a year ago. Distributable earnings of $672M or $0.53 per share more than doubled from a year ago amid $10B in sales of investments.
- CEO Schwarzman: "We are well positioned to capitalize on the dislocation in asset values created by greater market volatility.” Dry powder of $42.3B.
- Fee revenue of $682M up 17% Y/Y, Performance fees of $891M up 64%, Investment income of $80.8M down 19%, Total AUM of $284B up 15%.
- Private equity revenue of $388M up 159% Y/Y as Performance fees were nil a year ago and $221M this year. Investment income fell 78% Y/Y to $7.7M.
- Real Estate revenue of $793M up 20% Y/Y.
- Hedge Fund Solutions revenue of $158M up 8%.
- Credit revenue of $228M up 25%.
- The soon-to-be-spun off Financial Advisory business generated revenue of $87M, flat Y/Y.
- Conference call at 11 ET
- Previously: Blackstone misses by $0.06, beats on revenue
- BX -2.4% premarket
Oct. 16, 2014, 7:14 AM
Oct. 15, 2014, 5:30 PM
Oct. 10, 2014, 8:44 AM
- CEO Stephen Schwarzman notes Blackstone (NYSE:BX) began as an advisory firm nearly three decades ago, but now as the largest alternative asset manager in the world and with an ever-expanding universe of investments on its menu, Blackstone hasn't been free to grow the advisory business thanks to worries over potential conflicts of interest.
- The new entity will be a publicly-traded firm led, with PTJ's Paul Taubman as Chairman and CEO.
- Upon completion of the spinoff, current Blackstone unitholders will own about 65% of the new company, and Blackstone's advisory business team combined with Taubman and his partners will own the rest. The business generated about $380M of revenue over the year ended June 30.
- A conference call is set for 2 PM ET.
- Source: Press release
- Previously: Blackstone planning advisory business spinoff
- Shares +1.1% premarket
Oct. 10, 2014, 8:10 AM
- Blackstone's (NYSE:BX) financial advisory division is growing much more slowly than the businesses the company has taken on in the past decade (real estate, mezzanine lending, hedge-fund management and closed-end mutual funds). One way to resolve the dissonance is to spin it off.
- PJT Capital is a possible buyer.
- A person with knowledge of the plans asked Bloomberg not to be identified.
Oct. 6, 2014, 7:51 AM
- Typically, P-E companies raise money from investors in funds, and combine that capital with loans to acquire businesses. In what would be a major industry shift, firms like Blackstone (NYSE:BX) and Carlyle Group (NASDAQ:CG) are looking to put money to work directly in takeovers.
- It's a defensive move in response to sovereign wealth funds and pension funds that in recent years have hired their own staffs of bankers and private-equity honchos to make direct investments, rather than invest money in P-E funds. "Many have hired talented teams and are now much more concerned with the cost of active asset managers such as private-equity firms, which take a significant percentage of returns as fees and carry," says a business school professor.
- A possible model for the new approach would be last year's $23B purchase of Heinz by 3G Capital and Berkshire Hathaway. 3G didn't use a fund, but instead asked Berkshire to participate. Neither are now under pressure to sell at any pre-determined date.
Sep. 30, 2014, 3:29 PM
- Cement company Summit Materials was co-founded amid the depths of the financial crisis by Blackstone (NYSE:BX) and others, and has been a busy buyer ever since, making more than 30 acquisitions.
- The owners, reports Bloomberg, have hired Goldman and Citi to manage the offering, and the company could have a valuation of around $2.5B.
- The move comes amid a fast pace of deals in the cement industry, led by the $40B merger between Lafarge SA and Holcim Ltd., and Martin Marietta Materials purchase of Texas Industries Inc.
Sep. 25, 2014, 8:06 AM
- Travelport Worldwide (NYSE:TVPT) raises $480M in its IPO after pricing the deal at the high end of the expected $14-$16 range, giving the company an enterprise value of $4.3B.
- Blackstone (NYSE:BX) got involved in Travelport in 2006, injecting $775M of equity in a leveraged buyout, later increasing its investment to more than $800. The P-E firm later recouped nearly all of that in a dividend recap ... and then the recession hit.
- Most of Blackstone's holding in TVPT was wiped out in 2011 when junior creditors took control. Today it owns 9.5% of Travelport and isn't selling any shares in the offering. The proceeds from the IPO will be used to cut debt.
BX vs. ETF Alternatives
Blackstone Group LP is an alternative asset manager. It also provides financial advisory services, including corporate and mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement services.
Other News & PR