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Wednesday, January 28, 2009
Cut off by lenders, Blackstone tries investment banking to stay afloat

"Blackstone founder Stephen Schwarzman, the son of a dry goods store owner in Philadelphia, was swagger personified" during the private-equity and leveraged buy-out boom of the mid-2000s, writes Bloomberg's Jason Kelly. "He owns five trophy homes in Manhattan, East Hampton, Florida, the South of France and Jamaica," and pocketed nearly $700 million from Blackstone's 2007 initial public stock offering, as Blackstone-funded deals "helped inflate the credit bubble...

"Now Schwarzman and his rivals -- Henry Kravis of KKR & Co. and David Rubenstein of Carlyle Group -- are trying to endure the hangover from their binge. Buyout firms went on a record-breaking shopping spree in 2006-07, saddling themselves with $1.5 trillion in assets that they intended to sell at a profit. Since then, they haven’t been able to find buyers for their companies, depriving them of their main source of income: the 20 percent fee they reap from a profitable sale." And banks won't finance more deals.

Blackstone, the largest of the buyout firms, is trying to stay afloat by advising American International Group how to raise cash by selling assets, for example. To read the story, copy this into your browser:
http://www.bloomberg.com/apps/news?pid=20601109&sid=aJJx48OeDvX0&refer=home


Posted by Joseph N. DiStefano @ 7:21 AM  Permalink | 1 comment
Comments   
Posted 03:24 PM, 01/28/2009
Shabba Rommel
Blackstone reflected the greed and incompetance of easy money as provided by the Federal Reserve. Federal Reserve (aka Central Bank) is the root of much of our evils today. Washington, Jefferson, Adams, and Jackson all preached how a central bank would doom this Country.
1 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column, which is printed in the business pages of The Philadelphia Inquirer every Sunday, Tuesday, Wednesday, Thursday and Friday. Joe has worked at the Inquirer, mostly, since 1988. He has also written for Bloomberg and Gannett, authored the book Comcasted, majored in economics at Penn, and fathered six children. Reach Joe at 215-854-5194 and JoeD@phillynews.com

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