BX - The Blackstone Group Inc.
49.46 0.00 (0.00%)
After hours: 4:36PM EDT
| Previous Close | 47.84 |
| Open | 49.29 |
| Bid | 49.45 x 1800 |
| Ask | 49.46 x 800 |
| Day's Range | 49.25 - 50.02 |
| 52 Week Range | 26.88 - 50.02 |
| Volume | 5,199,259 |
| Avg. Volume | 6,967,849 |
| Market Cap | 59.11B |
| Beta (3Y Monthly) | 1.62 |
| PE Ratio (TTM) | 34.13 |
| EPS (TTM) | 1.45 |
| Earnings Date | Oct 16, 2019 - Oct 21, 2019 |
| Forward Dividend & Yield | 1.92 (3.93%) |
| Ex-Dividend Date | 2019-07-26 |
| 1y Target Est | 52.17 |
- Business Wire
Blackstone Hires Ram Jagannath as a Senior Managing Director for Growth Equity Investing
Blackstone (BX) announced that Ram Jagannath, an investor with more than two decades of experience in the healthcare and technology sectors, has joined the firm as a Senior Managing Director in its recently launched Growth Equity investing platform. Mr. Jagannath will lead healthcare investing for Blackstone’s growth equity business. Earlier this year, Blackstone launched a dedicated Growth Equity investing platform (Blackstone Growth, “BXG”), which is focused on providing capital to companies seeking to minimize the execution risks associated with high-growth environments.
- MarketWatch
Maximizing shareholder value can no longer be a company’s main purpose: top CEOs
The heads of nearly 200 U.S. companies said Monday they are committing to a move away from the idea that the main purpose of a company is to maximize shareholder value, marking a break with a long-held conviction.
- American City Business Journals
Leon Black's Apollo to place a bid for Hilton Grand, report says
Private equity giant Apollo Global Management is circling time-share operator Hilton Grand Vacations. The Leon Black-led firm (NYSE: APO) has not announced a bid, but the New York Post is reporting that the private equity shop could offer $36 a share. Hilton Grand Vacations is based in Orlando, Florida.
- American City Business Journals
Exclusive: Paramount in talks for deal topping $700 million
Paramount Group Inc. is in talks to buy Market Center in downtown San Francisco for about $723 million, according to three sources familiar with the discussions. Located between First and Second streets in the Financial District, the site includes two office towers at 555 and 575 Market St. In total, the towers comprise about 762,000 square feet, which would mean an average price tag of about $950 per square foot. Landlord Blackstone Group Inc. (NYSE: BX) could see a price leap of about 42 percent.
- Zacks
Reasons Driving Conversion of Private Equities Into C-Corp
Favorable markets and conversions into C-corps, which kick-started post the 2017 tax overhaul, are providing a boost to shares of private equity firms.
- Bloomberg
Policy Makers Should Take a Look at Private Equity
(Bloomberg Opinion) -- Private equity — a form of investing that typically involves assuming control of companies — has long been among the most controversial and poorly understood areas of finance. Even as it attracts ever more money from institutional investors, including pension funds acting on behalf of teachers and firefighters, its practitioners face increasing criticism for taking undue advantage the businesses they target.Now, with a new bill in Congress, presidential candidate Elizabeth Warren has sparked a debate about how to curb private equity’s more predatory aspects. Despite the political posturing, her plan includes a couple of good ideas.The most popular private-equity strategy stems from a tenet of finance theory — that an actively involved owner can do a better job of running a company than a diffuse group of passive shareholders. To put this into practice, firms such as Blackstone, TPG, Apollo and KKR raise money from investors, which they use to take significant or controlling stakes in companies. Ideally, they then improve the businesses, with the goal of selling at a profit within several years.When they adhere to this model, private-equity firms can play a useful role in the economy. The process isn’t always great for everyone involved. It can entail layoffs, cost-cutting and even dismantling. (Sometimes the best option for a mature business is to shrink along with a diminishing market.) But if assets are put to their best use, the country as a whole gains.The trouble is that private-equity executives’ incentives aren’t always aligned with the greater good.Consider compensation. Private-equity funds are typically set up as partnerships, with the firms serving as general partners and investors as limited partners. The latter pay management and performance fees to the former, which choose the target companies. Yet the general partners also extract fees directly from the companies — purportedly for management services and advice on mergers and acquisitions, although the fee agreements often don’t require them to do anything at all. Thanks to such “monitoring and transaction” payments, which amount to hundreds of millions of dollars a year in the U.S., private-equity executives can come out ahead even if the companies go bankrupt and investors lose out.One might reasonably ask why investors accept such terms. The answer, in part, is that they suffer from the same oversight problems that private equity is supposed to solve: They’re diffuse, have limited powers and are usually managing other people’s money.Granted, in recent years investors have pushed private-equity firms to rebate a portion of monitoring and transaction payments. This can make investment managers at pension funds and endowments look better by offsetting the management fees that their bosses and clients track. These rebates do not, however, lessen the drain on the companies concerned or necessarily erase the firms’ perverse incentives.Private-equity firms also have strong incentives to load up companies with too much debt. For one, they can use the borrowed money to pay themselves special dividends — a way of cashing out their investments quickly. And the government subsidizes debt: The tax code treats most interest payments as a deductible expense, unlike payments to shareholders. This makes borrowing artificially cheap, allowing firms to reap added returns merely by levering up. As of late 2018, the typical ratio of debt to operating income at private-equity-owned companies was about four times that of the average company in the S&P 500 index. Such extreme leverage has a big downside. It makes the target companies — and the people they employ — more vulnerable in slumps, as interest payments overwhelm their declining income.How can lawmakers discourage the bad kind of private equity without killing off the good? Warren has a plan. Together with several Democratic co-sponsors, she has introduced a 103-page bill that she says will stop “legalized looting.” It contains provisions dealing with everything from the basics of corporate structure to the minutiae of bankruptcy proceedings. Moderate it is not.One provision takes aim at a foundation of modern capitalism: limited liability, the idea that shareholders should not be on the hook for a company’s debts. It makes an exception for general partners in private-equity firms, holding them responsible for the obligations of target companies. This means that a single failed investment could lead to personal bankruptcy.No doubt, the prospect of financial ruin would make private-equity executives more cautious about borrowing. But it would also make them less willing to participate in an inherently risky endeavor — most likely killing private equity as an investment strategy. It’s hard to see how this would be a net gain for the economy.Setting aside that sledgehammer, the bill has some constructive proposals. For example, it would halt the fees that private-equity firms extract directly from target companies. That’s wise, because the firms have no good reason to pay themselves for running companies they own, particularly when they are already receiving fees from investors. If the market can’t impose this discipline, legislators are right to step in.The bill also prohibits special dividends in the first two years after an acquisition. The period is somewhat arbitrary, but this could lead private equity firms to focus more on improving businesses than on extracting cash, at least initially. Experience suggests it wouldn’t be too onerous: Europe imposed a similar ban several years ago with no ill effect.When it comes to the government subsidy, the legislation is strangely timid. It limits the deductibility of interest only for highly leveraged companies. Why not remove the subsidy completely, by taxing payments to creditors and shareholders equally? This would have beneficial effects far beyond private equity, eliminating an incentive to lever up that renders the whole economy more fragile.Lastly, Warren would shut down the well-known “carried interest” loophole, which allows performance fees to be taxed at low capital-gains rates rather than as ordinary income. That’s a good idea. It’s a pity the bill doesn’t also explicitly preclude other dodges, such as slipping private-equity stakes into individual retirement accounts — a strategy made famous by former presidential candidate Mitt Romney.In sum, policy makers do need to take a look at how private equity is taxed and regulated. Warren’s plan includes some good ideas but fails to take up others — and can’t seem to decide whether it wants to shut the business down or just nudge it in a better direction. It’s a plan, all right, but one that needs more work.—Editors: Mark Whitehouse, Timothy Lavin.To contact the senior editor responsible for Bloomberg Opinion’s editorials: David Shipley at davidshipley@bloomberg.net, .Editorials are written by the Bloomberg Opinion editorial board.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Zacks
Why Is Blackstone Group (BX) Up 3.5% Since Last Earnings Report?
Blackstone Group (BX) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
- GuruFocus.com
Julian Robertson Buys 3 Stocks in 2nd Quarter
New positions include David Tepper’s former top holding Micron Technology Continue reading...
- InvestorPlace
7 Ways to Play Private Equity Without Being a Billionaire
The world of private equity involves some of the world's most prominent asset managers. On Aug. 9, BlackRock (NYSE:BLK) closed a deal to invest $875 million for a 30% stake in Authentic Brands, the owner of Sports Illustrated, Nine West, Juicy Couture and many others. The investment was the first from the asset manager's new private-equity fund, Long Term Private Capital, which finished raising $2.75 billion in April from several cornerstone investors. Authentic Brands is the fund's first significant investment. InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhat makes BlackRock's private equity fund different is that it intends to make investments for the long haul. * 10 Cheap Dividend Stocks to Load Up On "For institutional investors who want equity exposure, there's a need for an additional type of investment on the continuum between publicly traded equities and leveraged buyout style private equity - one that is potentially more rewarding than public equities but less risky than highly-leveraged buyouts," said Mark Wiseman, Chairman of BlackRock's alternative investors division in April. Most private equity firms buy a company, add leverage to help pay for the acquisition, find some growth either organically or through bolt-on purchases, and then sell it of five to seven years later for several times the original equity investment. Private equity investing can be very lucrative. However, unless you've got billions to invest, many of the best opportunities are unavailable to the retail investor. To gain access to these private equity deals, there are some ways a regular Joe can do it. Here are seven options on how to invest in private equity without being a billionaire. Ways to Play Private Equity: BlackRock (BLK)Source: Shutterstock For those investors who aren't familiar with BlackRock, it's one of the largest asset managers in the world with $6.8 trillion in assets under management (AUM) as of the end of June. It operates iShares, the largest ETF provider in the world, with $2 trillion in AUM. iShares provides ETFs at relatively inexpensive management expense ratios. However, when you have $2 trillion in assets to generate fees from those ETFs, the revenues accumulate pretty quickly. In BlackRock's Q2 2019, iShares ETFs accounted for 39% of the company's base fees in the quarter. The company's ongoing foray into alternative investments such as private equity is going to take a long time to catch up to iShares' fee generation. In the second quarter, alternative investments accounted for just 8% of BlackRock's $2.9 billion in base fees.So, if you buy into BLK stock because of its Long Term Private Capital Fund, it's important to remember that it's but a small piece of the BlackRock pie; albeit a very interesting and innovative approach to private equity investing. Buying into BlackRock is a great way to play private equity while still hedging your bets. Brookfield Business Partners (BBU)Brookfield Business Partners (NYSE:BBU), the private equity arm of Toronto-based Brookfield Asset Management (NYSE:BAM), announced Aug. 13 that it was buying Genworth Financial's (NYSE:GNW) 57% stake in Genworth MI Canada, one of Canada's largest mortgage insurance providers. Brookfield is paying C$48.86 a share for the C$2.4 billion controlling interest. Genworth MI Canada is one of just three companies that provide mortgage insurance in Canada. This is the kind of deal Brookfield likes to make. It's paying a reasonable price for an asset that's got a lot of upside outside of Canada. "This hints at potential global expansion of MIC (Genworth MI Canada) operations … which could drive enhanced growth and profitability," National Bank of Canada analyst Jaeme Gloyn wrote in a note to clients. Under Genworth Financial's ownership, the Canadian unit was unable to operate in any countries where the parent operated. Now, it will be able to head south with a strong financial backer in its corner.Brookfield is known for adding value to its investments while remaining patient about its exit. The company will do what needs to be done to deliver excellent returns for shareholders. * 10 Stocks Under $5 to Buy for Fall BAM is one of my favorite stocks to hold forever because they understand capital allocation better than most. Blackstone Group (BX) Source: Shutterstock New York-based Blackstone Group (NYSE:BX) is one of the world's largest alternative asset managers with $512 billion in assets under management. On July 1, it completed its conversion from a publicly-traded partnership to a corporation. The company made the switch to make it easier for investors to own its stock. By converting, investors no longer need to file a Schedule K-1 for their taxes, making the paperwork from the investment far less cumbersome.Of the 150 largest U.S. public companies, Blackstone ranks first in terms of its long-term 10-year growth rate for revenues and earnings as well as its pre-tax margin and dividend yield. So, despite being one of the best-run businesses in the country, its partnership structure limited the market for its stock.For example, 58% of the largest 150 companies referenced above are included in U.S. long-only and index ETFs. By comparison, BX is only included in 21% of the U.S. long-only and index ETFs. That's all because it wasn't a corporation.As far as private equity goes, Blackstone has $171 billion in assets under management. Those assets are invested in more than 97 companies with combined revenues of more than $76 billion and employing more than 400,000 people around the world. At the current moment, it has $75 billion in available capital. Onex (ONEXF)Source: Shutterstock One of two Canadian private equity companies on the list, Onex (OTCMKTS:ONEX) has been in the news a lot lately for its acquisition of WestJet Airlines (OTCMKTS:WJAFF), Canada's second-largest airline behind Air Canada (OTCMKTS:ACDVF).On Aug. 13, the Canadian Competition Bureau OK'd the transaction. Previously, Canada's Transport Minister, Marc Garneau, approved the C$3.5 billion deal. Originally, Onex was prepared to pay C$35.75 a share. However, the ongoing troubles with the Boeing 737 Max reduced the price by C$4.75 to C$31. The deal's expected to be approved by the remaining Canadian regulators who have yet to render a decision. The transaction should close in the fourth quarter of 2019.Although WestJet is one of Onex's highest-profile acquisitions in its 35-year history, it manages more than C$39 billion in assets including C$6.9 billion of its own capital. Of the $39 billion, approximately 69% is invested in private equity with the rest in cash (18%), credit (12%) and fixed-income investments, as well as a small amount in real estate (1%). Onex's private equity investing has generated a gross multiple of capital invested of 2.6 times and a 27% gross IRR (internal rate of return) on realized, substantially realized, and publicly traded investments. * 15 Growth Stocks to Buy for the Long Haul Like Brookfield, it's a patient investor. Compass Diversified Holdings (CODI)Compass Diversified Holdings (NYSE:CODI) is by far the smallest of the private equity stocks listed in this article with a market cap of just $1.1 billion.Not only does CODI take majority-ownership stakes in middle-market businesses in North America, it also provides debt and equity for its subsidiaries to grow. It currently owns eight different companies.2019 has been a hectic year for CODI selling two of its businesses for large amounts. On July 1, it announced the sale of Clean Earth, one of the largest specialty waste processors in the U.S, for $625 million. The sale netted Compass Diversified $200 million which it used to eliminate the outstanding debt on CODI's revolving credit facility. In February, CODI sold Manitoba Harvest Hemp Foods to Tilray (NASDAQ:TLRY) for $316.6 million. Manitoba Harvest gives Tilray a big piece of the U.S. hemp foods market. Compass Diversified will turn around and find one or two new platform companies on which to grow. Once upon a time, CODI owned Fox Factory Holding (NASDAQ:FOXF), makers of bike and truck shocks, until it took FOXF public in 2013. With just eight businesses owned, it has a much easier job managing its investments. If you're patient, CODI will reward you over the long haul. Ways to Play Private Equity: Invesco Global Listed Private Equity ETF (PSP)The first of two available private equity ETFs, the Invesco Global Listed Private Equity ETF (NYSEARCA:PSP) has an exceptionally high management expense ratio of 2.03%. The ETF tracks the performance of the Red Rocks Global Listed Private Equity Index. The index typically invests in 40 to 75 private equity companies including BDCs, MLPs, and other investment vehicles. Currently, PSP has 68 holdings with 41% allocated to U.S. companies, another 16% to the UK, and Switzerland at 6%. If you like to invest in mid-cap and small-cap stocks, PSP allocates just 29% to large caps. Of its top 10 holdings, one of the companies listed in this article (Blackstone) is held in its largest holdings. Brookfield Business Partners, Onex, and Compass Diversified are also held. Over the past 10 years, PSP has generated an annualized total return of 9.5%, which is a decent, if not great return over the period. * 10 Stocks Under $5 to Buy for Fall If you're wondering why the fee is so high, it incorporates the fund fees of the 68 holdings in the ETF. The management fee itself is 0.50%. ProShares Global Listed Private Equity ETF (PEX)Not nearly as large an ETF in terms of assets with just $18.8 million, the ProShares Global Listed Private Equity (BATS:PEX), the ETF tracks the performance of the LPX Direct Listed Private Equity Index, a diversified global portfolio of listed private equity companies whose primary business is direct investments in private enterprises. It currently owns 30 stocks, including Onex, which is the ETFs second-largest holding, accounting for almost 10% of the entire portfolio. The largest holding in PEX is Ares Capital (NYSE:ARCC), a BDC with nearly $8 billion in market cap. It's hard to believe, but PEX is 75 basis points more expensive than PSP at 2.78% annually. Excluding the acquired fund fees from the ETFs 30 holdings, it charges 0.60%. There's no mystery why private equity ETFs haven't grown their net assets beyond $220 million. You're probably better off just putting money into an ETF that holds some of the companies listed above. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 7 Ways to Play Private Equity Without Being a Billionaire appeared first on InvestorPlace.
- Bloomberg
Now the London Stock Exchange Is Back to Life, It’s Investigation Time
(Bloomberg Opinion) -- The London Stock Exchange’s trading failure on Friday came at a bad time for the markets but a relatively good time for its newish CEO David Schwimmer. The former Goldman Sachs Group Inc. banker has been enjoying a glorious honeymoon. It had to end at some point.The precise cause of the outage, fixed within an hour and 40 minutes, isn’t clear. But when trading isn’t available for such a long period after the scheduled open, something has gone badly wrong. Time for an investigation.Schwimmer’s mind has been on big strategic matters. That’s what bankers like to do. Last month’s $27 billion deal to acquire the data provider Refinitiv (which competes with Bloomberg LP, the parent of Bloomberg News) from a Blackstone Group LP-led consortium and Thomson Reuters Corp was widely applauded. It saves London Stock Exchange Group Plc’s investment case from being defined by worries about Brexit. As a result, Schwimmer has plenty of personal capital right now. It helps also that he is relatively new and was appointed after a period of board turmoil.Leading the LSE nevertheless requires operational expertise. Schwimmer ran teams in his previous career, but in taking this job he has chosen a life as a full-time operator. Day-to-day management is as important as the 10-year vision. The consequences of this outage could have been far worse: It's been a volatile week in financial markets. Fortunately, there was little market-moving news flow on Friday morning.The LSE is a relatively small company, with roughly 4,500 staff. It comprises semi-autonomous silos, partly the result of being assembled through acquisition. When the former CEO Xavier Rolet’s future was in doubt, investors were relaxed about the individual units being able to run themselves if there was a long wait for a successor.Maybe the LSE’s fragmented organizational structure and governance has nothing to do with Friday’s failure. However, the outage gives Schwimmer a good reason to probe whether operations are sufficiently robust and ask if operational expertise is fully shared across the entire group. While this is a dull job compared to transformational M&A, management so often is.Refinitiv takes the LSE into new rather than overlapping areas. A big integration looms, although with little overlap it may not hamper the enlarged group’s ability to deal with a mini-crisis like this one. The deal will also further diminish the revenue contribution from trading in the FTSE 100 and FTSE 250 stocks that were suspended on Friday. Cash equities will still be the disproportionate driver of the LSE’s corporate reputation. Failures are highly visible. The business requires disproportionate focus.A week ago, large parts of the U.K. – including elements of the London transport commuter network – were hit by a power cut. Memories of that are already fading. People tend to forget about temporary outages so long as they don’t repeat. But Schwimmer shouldn’t waste this opportunity to channel his gaze inwardly.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- American City Business Journals
Multifamily madness: Top deals of 2019 could lead to Denver's 'best year' ever (Photos)
This year is shaping up to be one of the hottest for multifamily sales across metro Denver. With the big sale of Union Denver, record-setting portfolio deals and plenty of recent activity in the suburbs, brokers are saying they’ve never been busier. “Calls are coming in on a weekly basis with interest in this market,” said Terrance Hunt, vice chairman of Newmark Knight Frank’s multifamily team.
- American City Business Journals
Houston-based energy co. has 2 paths forward through bankruptcy
The company has to try to sell its assets, but if it can't, it will survive the process with new ownership and a fresh line of credit.
- Reuters
Coffee Day to sell Bengaluru tech park to Blackstone, cut debt
Coffee Day Enterprises Ltd said on Wednesday it planned to sell a tech park it owned in the southern Indian city of Bengaluru to Blackstone for up to 30 billion rupees ($421 million), in an effort to cut debt. The announcement comes weeks after the company's founder was found dead in a river in southern India, sparking speculation that he was under intense financial strain and prompting the company to look for options to deleverage its assets. Coffee Day said it entered a non-binding letter of intent with U.S.-based private equity firm Blackstone for the sale.
- Reuters
India's Coffee Day to sell Bengaluru tech park to Blackstone, cut debt
Coffee Day Enterprises Ltd said on Wednesday it planned to sell a tech park it owned in the southern Indian city of Bengaluru to Blackstone for up to 30 billion rupees ($421 million), in an effort to cut debt. The announcement comes weeks after the company's founder was found dead in a river in southern India, sparking speculation that he was under intense financial strain and prompting the company to look for options to deleverage its assets. Coffee Day said it entered a non-binding letter of intent with U.S.-based private equity firm Blackstone for the sale.
- Reuters
UPDATE 1-Anbang's Japan properties up for sale, Blackstone seen bidding -sources
China's troubled Anbang Insurance Group has put its $2.4 billion property portfolio in Japan up for sale and previous owner Blackstone Group is bidding, two people familiar with the company's plans said. The insurer is offering its entire portfolio of mainly residential buildings in Tokyo and other big cities after it failed to sell some of the assets last year, the sources said. Anbang is planning to sell the entire portfolio it bought from Blackstone," said one of the sources who declined to be identified because they were not authorised to speak publicly about the company's plans.
- Reuters
Anbang to sell entire $2.4 bln Japanese property portfolio, Blackstone seen bidding -sources
China's troubled Anbang Insurance Group has started a sale of its entire $2.4 billion Japanese property portfolio and previous owner Blackstone Group is bidding, two people said, after the insurer failed to sell some of the assets last year. Anbang is aiming to sell the entire residential portfolio it bought from the U.S. private equity firm, said the people, declining to be identified because the deal is not public. Anbang paid Blackstone around 260 billion yen ($2.4 billion) for the assets in 2017, in what was Japan's biggest property deal since the global financial crisis.
- Zacks
BlackRock Buys Stake in Authentic Brands: How Should Investors React?
On Sunday, August 11th, BlackRock (BLK) announced that it would be purchasing a roughly 30% stake in privately held Authentic Brands for $875 million, a deal that values the company at over $4 billion. Shares closed down 2.62% in trading Monday.
- Business Wire
Blackstone Hires Limin Wang as a Managing Director in Quantitative Research
Blackstone (BX) today announced that Limin Wang has joined the firm as a Managing Director on the Quantitative Research team in Blackstone Alternative Asset Management (BAAM). Limin joins from Laurion Capital Management, where he spent four years as a Portfolio Manager. Prior to that, he spent over ten years with Credit Suisse as a director on their proprietary trading desk.
- IPO-Edge.com
Evercore Hires Neil Shah as Senior MD to Lead Permanent Capital Business, Including SPACs
By John Jannarone Evercore Inc. has hired veteran investment banker Neil Shah as a Senior Managing Director to launch and lead its permanent capital business, which will include a push into special purpose acquisition companies, or SPACs. Mr. Shah, who will be part of Evercore’s advisory practice, has worked closely with financial sponsors for over […]
- TheStreet.com
Risk for BX Isn't so Black and White
It's unclear whether Blackstone Group will decline to $38, but that is a potential danger, so buyers need to keep that in mind.
- Bloomberg
Blackstone Takes Stake in European Buyout Firm BC Partners
(Bloomberg) -- Blackstone Group Inc. has taken a stake in BC Partners in a deal that will give the European private equity firm capital to expand.Blackstone acquired a passive, minority stake in the buyout firm through its Strategic Capital Group, which specializes in minority partnerships with alternative asset managers, BC Partners said in a statement on Tuesday.Blackstone is likely to invest about 500 million euros ($560 million) in the firm for a 10% to 15% stake, a person familiar with the deal had said, asking not to be identified because the terms of the deal are private.“This investment is a testament to the growth and institutionalization of our business, and will enable us to take the Firm to the next level for the benefit of our investors,” BC Partners Chairman Raymond Svider said in the statement.BC Partners will use the potential cash injection to help develop existing businesses as well as new strategies, such as real estate and credit. Blackstone and rivals, including units of Goldman Sachs Group Inc. and Neuberger Berman Group, have raised multibillion-dollar funds to acquire interests in firms that manage private equity, real estate and other alternative investments.While some firms have used proceeds to cash out founders, others have redeployed the money to diversify or commit additional capital to existing funds. A minority interest in asset managers can give investors a share of ongoing fee income, which is relatively predictable for firms with several closed-end funds.Evercore Inc. acted as BC Partners’s financial adviser.\--With assistance from Sarah Syed.To contact the reporters on this story: Heather Perlberg in Washington at hperlberg@bloomberg.net;Gillian Tan in New York at gtan129@bloomberg.netTo contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Amy Thomson, Ben ScentFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
The Leveraged Buyout Industry Is Starting to Eat Itself
(Bloomberg Opinion) -- A giant of U.S. private equity is taking a stake in a smaller European rival. It’s easy to see what’s in the deal for London-based BC Partners; for Blackstone Group LP, the investment logic requires more imagination.BC, which has $27 billion under management, was carved out of Barings Bank following the lender’s collapse in 1995. The firm made its name by shunning technology companies before the dot com bubble burst and focusing instead on unloved industries – a strategy that helped the funds it raised in 1997 and 2000 to make an impressive 24% internal rate of return.In recent years, though, performance has been deteriorating. Returns from its 2011 vehicle – which is still to be fully liquidated – are in the third quartile of funds for which Bloomberg has performance figures. The latest fund, which is still investing, is down 11% so far.BC has suffered from some troubled investments: British real estate agents Foxtons, satellite group Intelsat SA, U.K. retailer Phones4U and U.S. retailer PetSmart Inc. In private equity, you can have one dud – but a handful gets noticed.In 2017, Raymond Svider tried to revamp BC’s management structure, installing himself as sole head. That overhaul will take time to feed into improved investment returns. And the stubborn fact of life is that past performance is a key driver of fundraising success: The firm took 18 months to raise its most recent 7 billion-euro ($7.8 billion) fund.For BC, raising the next fund is going to be challenging at a time when the industry as a whole seems to be awash with cash.Enter Blackstone. It may invest about 500 million euros in BC for a 10% to 15% stake, according to Bloomberg News.The benefits to BC are plain to see. Above all, it gets an important vote of confidence from an industry leader. This is an ingenious way to get a halo. The financial proceeds can be used to bolster its core private equity business and expand its newer real-estate and credit operations. Blackstone may be able to advise BC on precisely what kind of firm it should be, in particular whether it should narrow its focus from the seven industries it currently targets.For Blackstone? It invests in alternative asset managers as an asset class in their own right through its Strategic Capital Group, so this isn’t a new departure. It probably has more money than opportunities. There is some logic to investing in familiar territory.What's more, there's a hint of opportunism here. The worst may already be behind BC. It has scored some decent exits lately, with the sale of financial data provider Acuris and animal health unit Antelliq. And it's not often that the chance comes along to take a meaningful stake in a firm like this.Europe’s private equity shops, still closely-held partnerships, are typically smaller than their U.S. peers, something that is making it increasingly difficult for them to compete in a world where buyouts are getting ever bigger. Don’t expect BC to be the last in the region to seek an ally.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- American City Business Journals
NY investor buys more Phoenix apartments — this time for $100M
The New York group has been scooping up multifamily properties around the Valley. An industry expert spoke to the Business Journal about the significance of the deal.
- Barrons.com
Blackstone, Apollo and Ares Stocks Are Private-Equity Buys, Barclays Says
Private-equity firms have been hot investments this year, and they could still produce more gains, according to Barclays analyst Jeremy Campbell,
