Greetings all. Per usual, The Blackstone Group (BX) is holding a media-only call prior to its 11am analyst call. Steve Schwarzman always skips this one, but we get president Tony James, public markets chief Joan Solotar and CFO Laurence Tosi. Let the live-blogging commence…
* Tony is going through the numbers. As I reported earlier, Q1 was Blackstone’s best quarter since going public in the summer of 2007.
* James acknowledges the global energy private equity fund, which currently is in market with a target of between $2 billion and $3 billion. Also notes a first close on the firm’s first-ever RMB fund. Got to wonder if that means the general PE fund, BCV VI, has held a final close… Will have to ask during Q&A.
* In real estate, focusing on “big and complex” transactions. Also says that firm is in “early stages of marketing” on new real estate investment fund.
* During PE discussion, no mention of cleantech practice shutdown or decision to spin out infrastructure group due to fundraising difficulties.
* “GSO continues as our fastest-growing business.”
* Advisory businesses “saw modest decline in revenues… restructuring also continues to decline as the economy improves.”
* Big jump in fund placement revenue (Park Hill Group).
* Patria, the Brazilian firm Blackstone bought last year, recently closed infrastructure fund and now is raising a new private equity fund.
* He discusses Charitable Foundation, which focuses on new jobs. Already launched in Detroit, and James says it will expand to five more states soon. This includes North Carolina, which is being announced next week (in partnership with Startup America).
* Blackstone’s U.S. portfolio companies last year grew global employment by 7%.
* Okay, Q&A time.
* James gets asked about LBO environment: “In short-term, it’s very competitive for those deals when they get large because there is lots of uninvested PE capital.” Also mentions easier credit and corporate competition. He does, however, think those conditions will change as PE firms work through dry powder and the Fed (eventually) raises interest rates. “For now we’re finding plenty of things to do elsewhere.”
* BCP VI not officially closed, although no new investors are coming in (just waiting on paperwork… kind of what we heard last quarter).
* Question on S&P move: “Personal view is this is a positive development, because I don’t see any conveivable way U.S. gets downgraded below AAA… so if this is a wake-up call to Washington, then it’s a good thing.”
* “Flirting with Russia for three years… inscrutable… open-minded about opportunities there… but one has to be very careful.”
* More Russia: Blackstone has “put a person there.”
* Park Hill: Main increase in fund placement activities has been in real estate and hedge, rather than in private equity. Moreover, James says that most of Park Hill’s PE activities are for small and mid-sized firms, so it wouldn’t contradict his argument that overall PE dry powder is shrinking in the market where Blackstone plays (i.e., large/mega-funds).
* That’s all folks…
