By Chris Witkowsky
NEW YORK, Feb. 27 (Buyouts Magazine) - Talk about smooth sailing. Blackstone Group(BX) has told its investors that it expects to hold a first close on its flagship private equity Fund VII in April on $10 billion, according to two limited partners with knowledge of the firm.
That is after officially launching the fund late last year with a $16 billion target and without a cap. The firm had been talking to potential limited partners about the fund since as early as last fall, sources said.
At this kind of pace, who knows how much Blackstone could potentially rake in for Fund VII. One LP who has heard the fundraising pitch said it would not be surprising if the firm tries to raise $18 billion or more.
Blackstone helped stoke the flames of the early fundraising by offering a six-month management fee holiday for early investors, the two sources said. This means LPs who commit prior to the first close will not pay management fees for six months, starting on the official first close date, one source said.
The fee holiday will help smooth out the J-curve for those LPs that qualify, the source said. The J-curve is the expected period of loss in the early years of a private equity fund, followed usually by gains as investments mature and are exited.
Blackstone will share 100 percent of any deal or monitoring fees with LPs in Fund VII, Blackstone President Tony James said during a media call earlier this year. This is the first time Blackstone has moved to a 100 percent deal fee offset in its private equity funds, though i
Board beware of spammer irepoyou2, he's crawling the AIG board under this and many other user names. j0n_48195 and iq_investment_tw to name but a few. One tees up the question for the other to respond with their sales pitch of the day. Sadly too much spam on the boards...
Thu, Feb 26, 2015, 6:10pm EST - US Markets are closed
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Blackstone's large US$1.8bn CMBS tops list of priced deals
9 minutes ago
By Joy Wiltermuth
NEW YORK, Feb 26 (IFR) - The Blackstone Group's US$1.8bn CMBS refinancing of Motel 6, a low-cost lodging chain it bought three years ago, was the biggest structured finance deal to price on Thursday, bankers and investors said.
Demand helped the issuer to tighten the top three classes 5bp-10bp from talk earlier in the week, even though the trade nearly cashed out Blackstone's entire US$626m equity stake in the company.
Presale reports showed that the new financing returned US$600m in equity to Blackstone, a point that two investors said made it less attractive than the initial US$1bn CMBS, which helped finance Blackstone's 2012 acquisition of Motel 6 from Accor.
"Is it a concern? We have conflicted thoughts," one analyst said. "We don't like to see big cash outs. But again, that's one reason why we will look at the sponsor."
Further down in credit, investors felt they wanted a bit more spread from Blackstone, particularly on the Triple B minus and Double B minus classes, which widened by roughly 15bp before they landed at Swaps plus 290bp and S+390bp, respectively.
Energy producer Samson Resources Corp., owned by private-equity firm KKR & Co.(KKR), is working with restructuring advisers, as a sharp decline in oil and gas prices complicates its efforts to stem losses and keep current on its multibillion-dollar debt load.
The Tulsa, Okla., company is working with law firm Kirkland & Ellis LLP's restructuring practice and Blackstone Group LP's(BX) restructuring advisory group on options for dealing with its $3.8 billion in long-term debt, according to people familiar with the matter.
Companies hire restructuring advisers to explore options to raise capital, sell assets or cut debt through out-of- court restructurings or bankruptcy filings. It isn't clear what options Samson is considering, though the company has previously said it is looking to sell some oil and gas fields.
KKR led a $7.2 billion buyout of Samson in 2011, as the shale-drilling boom was ramping up. The company took on $ 3.6 billion in debt as part of the takeover.
DJ Blackstone Seeks 'Coalition' Partners to Invest Like Buffett
Feb 25, 2015 07:38:00 (ET)
By Simon Clark
Blackstone Group is talking to its biggest investors to create a "coalition of the willing" that can buy control of large companies outside of its funds, according to Joe Baratta, head of private equity at the New York-based firm.
Blackstone usually buys control of companies through its main private-equity fund. It is talking to a select group of large investors who may want to own a company for longer than the usual term of private-equity ownership of five to 10 years and target lower returns.
Mr. Baratta likened the potential new approach to the style of Warren Buffett, whose Berkshire Hathaway Inc. doesn't have a time limit on its investments because it doesn't buy assets through a fund.
"I don't know why Warren Buffett should be the only person who can have a 15-year, 14 percent sort of return horizon," Mr. Baratta said at the Super Return private equity conference in Berlin.
Several large private equity groups recently started exploring ways to buy big companies in partnership with large investors outside their existing funds. The potential new approach comes as major institutional investors, such as pension funds and sovereign-wealth funds, who are clients of the big private-equity groups look for steady returns in an environment of persistently low global interest rates.
On Tuesday, TPG Capital co-founder Jim Coulter said the private equity industry is in a period of "titanic shifts" as investors look for new ways to buy companies. Mr. Coulter said the share of companies bought through fund structures likely will decrease as a result.
Blackstone's Mr. Baratta said his firm is working out how to create "a coalition of the willing who we'd put together to own an asset for a very long time."
A model for the new approach is the $23 billion purchase of H.J. Heinz Co. by 3G Capital and Mr. Buffett's Berkshire Hathaway Inc. 3G didn't use a fund to inv
In case you haven't noticed, Cramer isn't very reliable. A while back a newspaper dubbed him "The 47% kid" because that's how often he was right.
This next unit-price headwind is very ironic, since it's primarily driven by two factors that are actually among the strongest positives with BX: the high-yield distributions, and the financial strength of the firm, which puts somewhat of a short-term floor under the unit price. In other words, not only do short-term traders love to ride the momentum with the BX volatility that results from an ebb and flow of concerns over the various aforementioned regulatory issues, but short-term trading also disproportionately affects BX units in other ways.
For example, it's common for short-term traders to use the "dividend capture" tactic, which involves constantly trading in and out of stocks. Traders also tend to collectively "park" large chunks of cash in high-yield stocks for days, weeks or months in between trades, but have no intent of holding the shares beyond those short time periods. There are very few stocks that have a yield over 8%, yet simultaneously have a literally fortress-like balance sheet, so BX is clearly among the most frequented parking spots. The combined effect from all these factors is constant in-and-out trading, which can perpetuate otherwise normal minor selling into full sell-offs, and makes it harder to sustain any price level.
(click to enlarge)My BX investment thesis centers on two main drivers:  particularly strong leadership and,  cyclical nature of core businesses. As I opined in my prior article, the various people who lead BX are, at the absolute least, among the "smartest guys [and gals] in the room." That helps make investing worthwhile, especially when coupled with cyclicality in an environment of global economies recovering from a severe downturn. In the following excerpt from my prior BX article, the groundwork is set for the aspect of my thesis I want to expand on:
Sentiment: Strong Buy
Barclays Rating Update on The Blackstone Group L.P.
by Deanie Harlan on Feb 24, 2015
Equity Analysts at the Brokerage Firm, Barclays, maintains their rating on the shares of The Blackstone Group L.P. (NYSE:BX). Barclays has a Overweight rating on the counter. As per the latest research report, the brokerage house raises the price target to $43 per share from a prior target of $41.
Summit Materials of Denver files for IPO with value of $100M
Dec 19, 2014, 10:27am MST
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Kathleen Lavine | Denver Business Journal
Tom Hill, CEO of Summit Materials.
Denver Business Journal
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Denver-based Summit Materials Holdings Inc. has filed for an initial public offering.
Summit Materials supplies ready-mix concrete, cement, asphalt paving and other materials to the construction industry.
Summit, which moved its headquarters to Denver in 2013, yesterday filed an S-1 document with the Securities and Exchange Commission, one of the first steps toward becoming a company public.
Tom Hill builds Summit Materials despite recession
The preliminary prospectus, which is incomplete and can be changed, shows that the IPO could be valued at around $100 million.
The company has not returned request for comment, but the SEC imposes a silent period on companies after they file S-1 forms.
In a June interview, Summit CEO Tom Hill said the company would likely file for an IPO within 12 months.
Summit, which employs 4,500 people across its businesses nationwide, has experienced tremendous growth since Hill launched the company in 2009 with a $750 million equity from Blackstone Group.
In the first nine months of 2014, Summit brought in $870 million in revenue, according to financial documents provided to the SEC as part of the S-1.
In the June interview, Hill predicted the company would hit $1 billion in revenue in 2014.