just finished reading the Tuesday's WSJ article on Blackstone's planned sale of some real estate properties. Appears it could generate a $9 billion profit. Wow! I know that this won't all flow through to the public shareholders,and it'll take a few quarters to divest, but i'm amazed that the stock isn't soaring on the news. Even a small passthrough will allow the firm to easily beat quarterly estimates and return capital to investors. if i'm missing something, i'm open to constructive information. If not, cant wait until next week's earnings release to learn more. The second half of the year could be really, really interesting
Most of the profits will go to the private equity investors who bought into the Real Estate fund 5 years ago. BX raises money from institutional investors and High net worth individuals, who expect high profit for themselves (not BX public sharholders). Blackstone will be making annual management fees of 1-2% on the overall RE portfolio and then maybe 15-20% of the profit when the real estate is sold or they form an IPO. As of today, there is no realized profit so BX shareholders have no gains. BX management will pay themselves first from the management and performance fees and whatever is leftover, will go to shareholders. So BX shareholders only share in management fees and not the overall profit of the PE fund.
That is true. The BX is a partnership in the general partner. And the return is triggered by whatever the high water mark is. I am pretty sure that these properties would NOT be on the market unless those marks were met. That is the reason blackstone has chosen to forgo the IPO market. The prices are just not high enough to trigger BX's percentage. So, safe bet that the general partner will be getting some of that money!
This dog was infested with flees. That was the reason for it to under perform rather than trading in the mid 20 or higher. Until the flees jump off this poor dog, we won't see much of improvement. Glad to hear that the flees have started to jump off this dog. I was going to sell out asap. Now the flees are jumping off that I am going to wait for this dog to dust off the bad habitats. Would you post when you are totally out of this poor dog?