Wed, Apr. 8, 7:53 AM
- The talks are in early stages, reports Reuters, and would value First Eagle Investment Management at about $4B. Partnering with Blackstone (NYSE:BX) on the purchase is Corsair Capital.
- It's unclear what size stake the two are negotiating for, but one owner TA Associates owns about 25% of First Eagle. The majority is held by the family of John Arnhold. Among its assets, the company has seven mutual funds with $75.2B in AUM .
Wed, Apr. 1, 3:11 PM
- Blackstone (BX +0.8%) is close to an agreement to purchase Almada Forum and Forum Montijo from a fund controlled by Commerzbank, reports Bloomberg.
- The malls could be worth up to €100M each.
- The P-E firm has said Portugal has an "attractive" real estate sector, and late last year bought an office portfolio from Novo Banco - the lender which emerged from the breakup of Banco Espirito Santo.
- Blackstone just raised $14.5B in very quick fashion for its latest real estate fund, and needs to put the money to work (though it isn't clear if this purchase would be part of that fund).
- Previously: Blackstone reportedly raises $14.5B for latest fund (March 30)
Mon, Mar. 30, 6:15 PM
- Blackstone Group (NYSE:BX) is down 1.8% in late trading as it's putting up $1.2B-plus to buy three hotels from a Paulson & Co. consortium, The Wall Street Journal is reporting.
- The hotels -- the Ritz Carlton and J.W. Marriott in Orlando, Fla., and the J.W. Marriott in Scottsdale, Ariz. -- aren't small properties, with more than 2,500 rooms and 472K square feet of meeting space in total.
- The sales consortium includes Paulson, Winthrop Realty Trust (NYSE:FUR) and Capital Trust (now the Blackstone Mortgage Trust, BXMT).
- It's the dissolution of the CNL Hotels & Resorts portfolio that the group had picked up via foreclosure and distressed sales, and could mark a jump-start to transactions in the group-travel segment.
Mon, Mar. 30, 1:09 PM
- Private equity has peaked? Maybe not just yet. Only four months after beginning fundraising, Blackstone (BX +1.1%) has closed the institutional portion of its latest real estate fund after securing $14.5B in commitments, reports the WSJ. The company plans to raise another $1.3B from retail investors, and expects to start making putting money to work within the next month.
- The fund's name is Blackstone Real Estate Partners VIII.
- Previously: Kessler: Glory days of P-E are over (March 30)
Mon, Mar. 30, 8:09 AM
- David Swenson - the investment manager of the Yale endowment - ushered in the private-equity era nearly three decades ago with his success in allocating part of the portfolio to "alternative" assets, writes Andy Kessler. The so-called Swenson model has been widely copied since, and last year 765 P-E funds raised $266B, up 11% from 2013.
- Private-equity, however, has peaked, argues Kessler, noting a number of reasons, among them the ending of the three-decade-plus decline in interest rates, a slowdown in bank lending for the leveraged deals upon which P-E runs, and the threat of tax reform in which interest rate deductions for debt could be targeted.
- Most importantly though, says Kessler, P-E is an economic growth killer. Buying out a drugstore chain and loading it with debt isn't investing in the productivity of the economy. Instead, it does just the opposite - generating wealth for the endowments and pension funds invested, but destroying it for the economy.
- Kessler throws in one more reason P-E is done: The industry is fresh out of big targets. The bust of Energy Future Future holdings means utilities are out, and what's left in food following the Kraft purchase? Tech? Forget it, as the money required to service debt squeezes out what's needed for R&D.
- Among those reading this morning: BX, KKR, CG, APO, FIG.
- ETFs: PSP, PEX
Thu, Mar. 26, 11:37 AM
- Private-equity buyouts of $17.14B YTD are at their lowest level since 2012 as banks - with regulators looking over their shoulders - cut back on the amount of debt they'll extend for takeovers. Leveraged loan volume this year of $26.5B is 82% less than the same time frame in 2014, and the lowest since 2009.
- Fewer and smaller deals, along with less leverage means less risk, but also means lower returns for buyout firms. It also means lower prices for sellers.
- “The limitation on leverage has taken away some buying power and in some cases, created a gap between sellers’ expectations and the price that private-equity firms can justify paying,” says Carlyle Group's (CG -1%) Pete Clare.
- According to S&P Capital IQ, 21% of P-E deals this year have been financed with leverage at or above levels deemed risky by regulators; that's down from 35% in Q4 and 60% in Q3.
- Along with Carlyle, Blackstone (BX -0.9%) in its annual report warned leverage restrictions could hurt its business. Apollo Global (APO -1.7%) and KKR (KKR -1.2%) included similar language in both their 2013 and 2014 filings.
- Source: WSJ
- ETFs: PSP, PEX
Wed, Mar. 18, 7:27 AM
- Blackstone (NYSE:BX) late last year agreed to spin off its advisory operation into a new publicly traded company run by Paul Taubman. Reuters reports more than half of the 17 senior managing directors working in Blackstone's M&A advisory arm may leave - having lost out to bankers doing similar work at Taubman's PJT Capital, or deciding to move elsewhere, or retiring.
- Even though Blackstone shareholders are expected to own 65% of the combined business, the mass exit suggests its Taubman who has the largest role in shaping it.
- Previously: Blackstone advisory business spinoff confirmed (Oct. 10, 2014)
Mon, Mar. 16, 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)
Mon, Mar. 16, 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)
Tue, Mar. 10, 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.
Fri, Mar. 6, 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.
Wed, Feb. 25, 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.
Mon, Feb. 23, 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.
Fri, Feb. 13, 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
Wed, Feb. 11, 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.
Tue, Feb. 10, 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.
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.
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