Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Reuters – Blackstone Group LP has cut the size of its planned Asia-focused hedge fund because the global financial crisis has led to redemptions, the Wall Street Journal said citing people familiar with the situation.
Blackstone, which manages private equity, real estate and hedge funds, would cut the fund size to about $200 million from a range of $500 million to $1 billion, the paper said.
New York-based Blackstone, about one-10th owned by China’s sovereign wealth fund, has scaled back its plans for the fund at a time when hedge funds around the world are facing redemption pressure, with some forced to shut down, the Journal said.
West Palm Beach (HedgeCo.net) – State-owned company China National Chemical Corporation (ChemChina) and hedge fund manager the Blackstone Group announced the closing of Blackstone’s investment in ChemChina subsidiary, China National Bluestar Corporation.
Bluestar has also completed its group restructuring and has registered as a Sino-foreign joint stock limited company. Blackstone will invest up to $600 million in Bluestar for a 20% stake. Two Senior Managing Directors of Blackstone, Antony Leung and Ben Jenkins, will join the board of Bluestar.
Headquartered in Beijing, ChemChina was founded in 2004, and administrated by the State-owned Assets Supervision and Administration Commission of the State Council of China. Through fast growth in the last 4 years, ChemChina is now a large group corporation with both asset value and revenue exceeding RMB100 billion ($14.6 billion). ChemChina is ranked 35th among China’s top 500 corporations, according to National Bureau of Statistics of China.
The Blackstone Group’s alternative asset management businesses include the management of corporate private equity funds, real estate opportunity funds, funds of hedge funds, mezzanine funds, senior debt funds, proprietary hedge funds and closed-end mutual funds.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Reuters – Private equity firm Blackstone Group LP’s chief operating officer said on Tuesday that the limit on bank financing for leveraged buyouts was about $5 billion.
But COO Tony James said there were multiple opportunities to invest despite the market turmoil and the limit on financing, adding the company has had a very active 12 months, investing $8.7 billion in 27 deals since the credit meltdown.
"People say you can’t do leveraged buyouts," said James. "That’s not correct. We are getting bank financing for LBOs (leveraged buyouts), but we’re not getting bank financing for deals over about $5 billion in size."
He said the current volatile market conditions were ideal times for Blackstone to invest.
"One could be forgiven for thinking this is a hostile environment for Blackstone," said James, speaking at a Lehman Brothers conference that was webcast. "I don’t agree at all. I think it’s a fantastic environment. Turmoil, discontinuity in the market and scarce capital are absolutely ideal forces for our businesses."
Blackstone has taken part in some of the largest leveraged buyouts ever, such as the $23 billion purchase of Equity Office Properties Trust, but has also done numerous smaller buyouts.
West Palm Beach (HedgeCo.net) – Wall Street Journal columnist Gregory Zuckerman and Ely Razin, senior director of strategy, Westlaw Business, will deliver a luncheon presentation on "State of the Hedge Funds for 2008" at a upcoming Hedge Fund General Counsel Summit, according to Incisive Media, publisher of Corporate Counsel magazine.
The event will take place September 25, 2008 at The Sheraton Hotel in Stamford, Connecticut. Targeted to general counsel and deputy counsel in the hedge fund industry, the one-day conference will present insights into the current state of the industry in today’s uncertain times.
Zuckerman writes the "Heard on the Street" column for the Wall Street Journal and authored two recent articles on hedge funds: "Shakeout Roils Hedge Fund World" and "Hedge Funds Are Caught in a Tight Spot." He recently won the NY Press Club Journalism award, and was nominated for a 2008 Gerald Loeb award for coverage of the mortgage meltdown. Zuckerman is a frequent commentator for CNBC on hedge funds and stocks.
Additional industry experts and practitioners who will be speaking at the conference include, Tia Breakley, vice president, The Blackstone Group LP, David Brooks, managing director & deputy GC, Fortress Investment Group LLC, and Simon Lorne, vice chairman and chief legal officer, Millennium Management LLC.
Corporate Counsel’s Hedge Fund General Counsel Summit is part of Incisive Media Conferences & Trade Shows, a producer of educational and networking events for business leaders and professionals.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
The Ledger – Lehman Brothers, the troubled investment bank, is considering the sale of all or part of its prized money management division to private equity firms to raise billions of dollars of capital and ease the pressure caused by losses related to real estate.
The move would be the latest by a Wall Street firm forced to sell off high-end assets, following the recent sale by Merrill Lynch of its stake in Bloomberg L.P. and the sale by Citigroup last month of its large German consumer banking franchise.
Lehman sent letters last week to a number of financial companies, including private equity firms like Kohlberg, Kravis & Roberts, J. C. Flowers, the Blackstone Group, the Carlyle Group and Apollo Management, to test interest in its money management division, according to several people briefed on its contents.
The letter, a so-called memorandum of understanding, did not put a value on the division. It said that interested parties could bid for all or some of the pieces but encouraged bidders to make an offer for the whole business.
West Palm Beach (HedgeCo.net) – Alternative investment manager, the Blackstone Group, has launched a new business group focused on investments in the cleantech energy sector and will provide advice on renewable energy strategies across Blackstone’s asset base.
The team is being led by James D. Kiggen, who has joined the firm’s Corporate Private Equity group as a Senior Managing Director. Also joining as Principals from AllianceBernstein are Walter C. Vester and Richard L. Troyer.
“Jamie and his team’s understanding of rapidly evolving technology applications in solar and wind power generation, carbon sequestration, next generation ethanol, and other renewables will be a key input in Blackstone’s investment decisions." Garrett Moran, Senior Managing Director of The Blackstone Group, said, "We look forward to working with the new team across both conventional energy investments and new developments, including those at our portfolio company Sithe Global Power, as well as several other sizeable investments that we are currently evaluating.”
Blackstone’s alternative asset management businesses include the management of corporate private equity funds, real estate funds, hedge funds, funds of funds, debt funds, collateralized loan obligation vehicles (CLOs) and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement service.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
International Herald Tribune – Blackstone Group, manager of the world’s largest leveraged-buyout fund, said Wednesday that second-quarter profit beat analysts’ estimates as gains from hedge funds offset a decline in private-equity takeovers.
Net economic income, a measure that excludes some compensation costs, fell 75 percent to $165.6 million, or 15 cents a share, from $655 million, or 58 cents, a year earlier, the New York-based Blackstone said. That exceeded the average estimate of 8 cents a share by 10 analysts in a Bloomberg survey. Revenue declined 63 percent to $353.7 million.
Blackstone’s fees from buying and selling companies have plunged as buyouts of more than $2 billion dried up and initial public offerings fell to their lowest in four years. Investors backed away from the debt used to finance LBOs in the fallout from the collapse of subprime-mortgage securities in the second half of last year.
New York Times – The Blackstone Group may be best known as an immense private equity firm, but the firm’s earnings report on Wednesday made it clear that Blackstone has been buoyed by its hedge fund operations.
Blackstone reported $165.6 million in profit for its second quarter, excluding costs tied to its initial public offering last June. That represented a nearly 75 percent drop from the same period last year, a consequence of the troubles still plaguing the credit markets. On the basis of generally accepted accounting principles, the firm reported a pretax loss of $185.5 million.
Yet Blackstone’s results, which amount to 15 cents a unit, still beat the average analyst estimate of 8 cents a unit, according to Bloomberg News.
Other publicly traded alternative-asset managers also reported quarterly earnings on Wednesday. Och-Ziff Capital Management, a big hedge fund, said it earned $93.3 million, while GLG Partners, a large hedge fund based in London, reported profits of $44.2 million. Both figures exclude costs related to the firms’ public offerings.
West Palm Beach (HedgeCo.net) – Global alternative asset manager Blackstone Group is opening a representative office in Beijing with former Vice President of Beijing Mainstreets Investment Group, Mr. Shan Fu as chief representative.
"The opening of our Beijing office and the appointment of Shan further underlines our deep commitment to China and the Chinese market." Stephen Schwarzman, Chairman, CEO and Co- Founder, of Blackstone, said, "We welcome Shan to the firm and we look forward to working together."
Fu previously worked in China’s National Development and Reform Commission (“NDRC”), the State Economic and Trade Commission of China, the Office of Economic and Trade in State Council of China, and the Office of Production of the State Council of China.
Fu commented: "I am very excited about joining Blackstone as its Chief Representative in Beijing. I look forward to working with the Blackstone China team to channel the global reach and resources of Blackstone’s alternative asset and advisory platform and increase its presence in the China markets."
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Bloomberg- Henry Kravis is taking KKR & Co. public and moving into real estate and stock funds as he tries to catch up with Stephen Schwarzman’s Blackstone Group LP, the world’s largest private-equity firm.
KKR, co-founded by Kravis in 1976, relied on leveraged buyouts for 95 percent of profit last year, compared with 29 percent for Blackstone.
That has left the New York-based firm more vulnerable to the collapse of the LBO market, where announced deals fell more than 70 percent to $163.1 billion this year through July 25 from the same period in 2007, data compiled by Bloomberg show.
Bloomberg- When Blackstone Group LP, the world’s biggest buyout firm, was pursuing the takeover of the Weather Channel cable network earlier this month with General Electric Co. and Bain Capital LLC, Wall Street balked at providing financing.
So the New York-based company turned to GSO Capital Partners LP, the hedge-fund manager it acquired in March, to pull off the largest U.S. leveraged buyout this year.
Blackstone can’t wait for banks, stuck with almost $100 billion of debt from earlier LBOs, to start lending again. Instead, it’s pushing deeper into deal financing with GSO. The strategy may hurt the hedge-fund unit’s returns — some approaching 40 percent — if slowing economies lead companies taken private by Blackstone to default on their debt.
Bloomberg- When Blackstone Group LP, the world’s biggest buyout firm, was pursuing the takeover of the Weather Channel cable network earlier this month with General Electric Co. and Bain Capital LLC, Wall Street balked at providing financing.
So the New York-based company turned to GSO Capital Partners LP, the hedge-fund manager it acquired in March, to pull off the largest U.S. leveraged buyout this year.
Blackstone can’t wait for banks, stuck with almost $100 billion of debt from earlier LBOs, to start lending again. Instead, it’s pushing deeper into deal financing with GSO. The strategy may hurt the hedge-fund unit’s returns — some approaching 40 percent — if slowing economies lead companies taken private by Blackstone to default on their debt.
