Blackstone Group L.P. is the American multinational private equity, alternative asset management and financial services company based in New York City. As the largest alternative investment company in the world, Blackstone specializes in private equity investment strategies, credit and hedge funds. As of December 31, 2017, Blackstone had $ 434 billion under management.
Blackstone's private equity business has been one of the biggest investors in leverage purchases in the last decade, while its real estate business has been actively acquiring commercial real estate. Since its inception, Blackstone has invested in leading companies such as Hilton Worldwide, Merlin Entertainment Group, Food Performance Group, Equity Office Properties, Republican Services, AlliedBarton, Common Biscuits, Freescale Semiconductor, Vivint, and Travelport.
Blackstone was founded in 1985 as a merger and acquisition boutique by Peter G. Peterson and Stephen A. Schwarzman, who previously worked together at Lehman Brothers, Kuhn, Loeb Inc. Blackstone has become one of the largest private equity investment companies in the world. In 2007, Blackstone became a public company through a $ 4 billion initial public offering to become one of the first large private equity firms to register shares in its management company on the public stock market. Blackstone is headquartered at 345 Park Avenue in Manhattan, New York City, with eight additional offices in the United States, as well as offices in Bhubaneswar, London, Paris, Dublin, DÃÆ'¼sseldorf, Sydney, Tokyo, Hong Kong, Singapore, Beijing, Shanghai, Mumbai, and Dubai.
Video The Blackstone Group
Business segment
Blackstone has four business segments:
- Private Equity: seven public private equity funds and three sector focused funds with assets of $ 105.56 billion managed.
- Real Estate: the largest private real estate equity firm in the world with $ 115.34 billion of managed assets.
- The Hedge Fund solution: primarily comprised of Blackstone Alternative Asset Management (BAAMÃ,®), the world's largest discretionary investor in hedge funds.
- Credits: primarily comprised of GSO Capital Partners, one of the world's most financially oriented finance-focused asset managers.
Corporate personal equity
In 2011, Blackstone is the 5th largest private equity firm in the world with a capital commitment, focusing primarily on debt purchases from more mature companies. The company also invests through minority investments, corporate partnerships, and industry consolidation, and sometimes, initial investment in new entrants in existing industries. The company focuses on friendly investments in large capitalization companies.
Blackstone employs approximately 120 private equity investment employees in New York City; London; Menlo Park, California; Mumbai; Hongkong; and Beijing.
Blackstone relies primarily on private equity funds, a collection of capital commitments from pensions, insurance companies, endowments, funding, high-value individuals, state wealth funds, and other institutional investors. By the end of 2008, Blackstone had completed fund-raising for six funds with total investor commitments in excess of $ 36 billion, including five traditional private equity funds and a separate fund focusing on telecommunications investment.
Blackstone private equity funds through early 2009:
From 1987 to an IPO in 2007, Blackstone invested about $ 20 billion in 109 private equity transactions.
The most prominent Blackstone investments include Allied Waste, AlliedBarton Security Services, Graham Packaging, Celanese, Nalco, HealthMarkets, Houghton Mifflin, American Axle, TRW Automotive, Catalat Pharma Solutions, Prime Hospitality, Legoland, Madame Tussauds, Luxury Resorts (LXR), Pinnacle Foods, Hilton Hotels Corporation, Apria Healthcare, Travelport, The Weather Channel (United States) and The PortAventura Resort. In 2009 Blackstone bought Busch Entertainment (consisting of Sea World Parks, Busch Garden Parks, and two water parks).
In 2012, Blackstone acquired a controlling stake in Vivint, Inc. based in Utah, home automation, security, and energy companies.
Former investments include Universal Studios Parks, which is sold to Comcast.
Real estate
Blackstone started its real estate investment business in 1992 by acquiring a series of hotel businesses and building it into a global operation with 122 investment professionals in the United States, Europe and Asia. The real estate business has raised about $ 28 billion for various vehicle funds, including six funding focusing on the US and three international opportunity funds. Blackstone also raised a special fund of real estate situations that focus on non-controlling debt and equity investment opportunities. Special situation funds invest directly in real estate as well as securities related real estate private and public.
The following is a summary of the Blackstone real estate fund that emerged from the beginning:
From 1987 until the IPO filing in 2007, Blackstone invested more than $ 13 billion in 212 real estate transactions and was a major owner of real estate throughout the US and Europe. The most notable Blackstone real estate investments are Equity Office Properties, Hilton Hotels Corporation, Trizec Properties, Center Parcs UK, La Quinta Inns & amp; Suites, Motel 6, Wyndham Worldwide, Health Centers and Cross-Health Health Centers.
The buying and profitable IPO of Southern Cross caused controversy in the UK. Part of the purchases involved divides the business into a property company, NHP, and a nursing home business, which Blackstone claims will be "a leading company in the elderly care market". In May 2011, Southern Cross, now independent, is almost bankrupt, endangering 31,000 elderly in 750 nursing homes. It denies blame, though Blackstone is widely accused in the media for selling to companies with unsustainable and paralyzed business models with impossible sales and leaseback strategies.
After the subprime mortgage crisis, Blackstone Group LP buys more than 5.5 billion single-family homes for rent, for sale when prices rise.
In 2014, Blackstone sold the Northern California office building for $ 3.5 billion.
Management of marketable alternate assets
In 1990, Blackstone created a hedge fund business to manage internal assets for Blackstone and its senior managers. This business evolved into a marketable segment of alternative Blackstone asset management, opened to institutional investors. Among the investments included in this segment are funds from hedge funds, mezzanine funds, senior debt vehicles, exclusive hedge funds, and closed mutual funds. Consolidated as Blackstone's Hedge Fund Solutions group, Blackstone Alternative Asset Management L.P. (BAAMÃ,®) has approximately $ 75 billion in assets managed on December 31, 2017.
In March 2008, Blackstone acquired GSO Capital Partners, an alternative credit-oriented asset manager, for $ 620 million in cash and stock and up to $ 310 million through earnings over the next five years based on certain revenue targets. The combined entity creates one of the largest credit platforms in the alternative asset management business, with over $ 21 billion managed. The GSO was founded in 2005 by Bennett Goodman, Tripp Smith, and Doug Ostrover. The GSO team has previously managed financial businesses with leverage levels at Donaldson, Lufkin & amp; Jenrette and then Credit Suisse First Boston, after they acquired the DLJ. Blackstone has been an original investor in GSO funds. After the acquisition, Blackstone combines GSO operations with existing debt investment operations.
Financial advisory services
Blackstone's financial advisor business consists of three businesses:
- Mergers and acquisitions
- Restructuring company
- Private placement agent
Among the most prominent companies and Blackstone mergers and acquisitions, client advisors include Microsoft, Procter & amp; Gamble, Verizon, Comcast, Sony and AIG.
In 1991, with the collapse of the 1980s purchase boom, Blackstone began offering consulting services in corporate restructuring as well. Blackstone's most renowned restructuring clients include General Motors Xerox, Enron, Bally Total Fitness and Global Crossing.
The Blackstone placement advisory group, The Park Hill Group , was formed in 2005 with professional teams from Atlantic-Pacific Capital and Credit Suisse. The group focuses on raising capital from institutional investors for private investment vehicles investing in private equity, mezzanine, real estate, venture capital and hedge funds. Park Hill Group also provides a secondary consulting service for investors looking for portfolio liquidity and aid commitments without funding.
In 2006, John Studzinski joined Blackstone as senior managing director in advisory and investment groups and as a member of the company's executive committee. He was recruited to oversee and expand Blackstone's merger-and-acquisition advisory business, Blackstone Advisory Partners , in the United States and Europe, and to open an office in London. His main role as global head of Blackstone Advisory Partners is to oversee the business A & M Blackstone business advisory services in the US, and further develop M & A advisory firms in Europe and Asia. In early 2015, Blackstone began spinning from three divisions, including M & amp; A, in order to avoid potential conflicts of interest with its main private equity business. After assisting the transition, Studzinski became Deputy Chair of Investor Relations and Business Development at The Blackstone Group. In this capacity, he holds the responsibility for a number of international and international institutional relationships, as well as families with ultra-high wealth outside the US.
Maps The Blackstone Group
History
Establishment and initial history
The Blackstone Group was founded in 1985 by Peter G. Peterson and Stephen A. Schwarzman with an initial capital of $ 400,000. The founders named their company "Blackstone", which is a cryptogram derived from the names of the two founders (Schwarzman and Peterson): "Schwarz" is German for "black"; "Peter", or "Petra" in Greek, means "stone" or "stone". The two founders have previously worked together at Lehman Brothers, Kuhn, Loeb Inc. At Lehman, Schwarzman serves as head of global mergers and acquisitions business of Lehman Brothers. Prominent investment banker Roger C. Altman, another Lehman veteran, left his position as managing director of Shearson Lehman Brothers to join Peterson and Schwarzman at Blackstone in 1987, but left in 1992 to join the Clinton Administration as Deputy Minister of Finance.
Blackstone was originally formed as a merchant and acquisition advisory boutique. Blackstone advises on the merger of investment bank E. F. Hutton & amp; Co and Shearson Lehman Brothers, garnered a $ 3.5 million fee.
Since the beginning of 1985, Schwarzman and Peterson are planning to enter the private equity business, but are having difficulty in raising their first funds because they have never led a leveraged purchase. Blackstone completed a fundraiser for its first private equity fund after a stock market crash in October 1987. After two years of providing strict counseling services, Blackstone decided to pursue a merchant banking model after its founders determined that many situations require investment partners rather than just advisors. The biggest investors in the first fund included Prudential Insurance Company, Nikko Securities and General Motors pensions.
Blackstone also ventured into other businesses, especially investment management. In 1987 Blackstone held a 50-50 partnership with BlackRock founders Larry Fink and Ralph Schlosstein. The two founders, who previously run a mortgage-backed securities division at First Boston and Lehman Brothers Kuhn Loeb, each of whom initially joined Blackstone to manage investment funds and advise financial institutions. They also plan to use Blackstone funds to invest in financial institutions and help build an asset management business that specializes in fixed income investments.
As the business grew, Japanese bank Nikko Securities acquired a 20% interest in Blackstone for a $ 100 million investment in 1988 (valuing the company at $ 500 million). Nikko's investment enables a massive expansion of the company and its investment activities. The growth company also recruited politician and investment banker David Stockman from Salomon Brothers in 1988. Stockman led many key transactions of his time in the company, but has a diverse record with his investments. He left Blackstone in 1999 to start his personal equity firm, Heartland Industrial Partners, based in Greenwich, Connecticut.
The company suggested CBS Corporation on CBS Records sales in 1988 to Sony to shape what would become Sony Music Entertainment. In June 1989, Blackstone acquired the freight carrier, CNW Corporation. That same year, Blackstone partnered with Salomon Brothers to raise $ 600 million to gain distress in the midst of a savings and loan crisis.
1990s
When 1990 began, Blackstone continued its growth and expansion into new business. In 1990, Blackstone launched a hedge fund business fund, initially intended to manage investments for Blackstone's senior management. Also in 1990, Blackstone expanded its ambitions to Europe, forming a partnership with J. O. Hambro Magan in Britain and Indosuez in France. In 1991, Blackstone created a European unit to increase the company's presence internationally.
In 1991, Blackstone launched its real estate investment business by acquiring a series of hotel businesses under the leadership of Henry Silverman. In 1990, Blackstone and Silverman acquired 65% stake in Prime Motor Inn's Ramada and Howard Johnson's franchise of $ 140 million, creating Hospitality Franchise Systems as the parent company. In October 1991, Blackstone and Silverman added Days Inns of America for $ 250 million. Then, in 1993, Hospitality Franchise Systems acquired Super 8 Motels for $ 125 million. Silverman will eventually leave Blackstone to serve as CEO of HFS, which will later become Cendant Corporation.
Blackstone made a number of important investments in the early and mid 1990s, including Great Lakes Dredge and Dock Company (1991), Six Flags (1991), US Radio (1994), Centerplate (1995), MEGA Brands (1996). Also, in 1996, Blackstone partnered with the Loewen Group, the second largest funeral home and funeral in North America, to acquire funeral home and funeral businesses. The first acquisition partnership was the purchase of $ 295 million from the Prime Succession of GTCR.
Through the mid and late 1990s, Blackstone continued to grow. In 1997, Blackstone completed a fundraiser for its third private equity fund, with approximately $ 4 billion of investor commitments and $ 1.1 billion in real estate investment funds. The following year, in 1998, Blackstone sold a 7% stake in its management company to AIG, replacing Nikko Securities as the largest investor and valuing Blackstone for $ 2.1 billion. Then, in 1999, Blackstone launched a mezzanine capital business. Blackstone brings five professionals, led by Howard Gellis from Nomura Holding America's Leveraged Capital Group to manage the business.
Blackstone investments in the late 1990s included AMF Group (1996), Haynes International (1997), American Axle (1997), Premcor (1997), CommNet Cellular (1998), Graham Packaging (1998), Centennial Communications (1999), Bresnan Communications (1999), PAETEC Holding Corp (1999). Haynes and Republic Technologies International, a specialized steelmaker in which Blackstone was invested in 1996, both had problems and eventually filed for bankruptcy.
Also, in 1997, Blackstone made its first investment in Allied Waste. Two years later, in 1999, Blackstone, together with Apollo Management provided capital for the acquisition of Allied Waste against Browning-Ferris Industries in 1999 to create the second largest waste management company in the US. Blackstone's investment in Allied was one of the largest up to that point in the company's history.
Investment in the telecommunications business - four cable TV systems in rural areas (TW Fanch 1 and 2, Bresnan Communications and Intermedia Partners IV) and mobile phone operators in the Rocky Mountain (CommNet Cellular) countries are among the most successful in this era. , generating $ 1.5 billion in profit for Blackstone funds.
Blackstone Real Estate Advisor, his real estate affiliate, purchased the Watergate Complex at Washington D.C. in July 1998 for $ 39 million and sold it to the Reality Monument in August 2004.
Beginning 2000s
Blackstone acquired a mortgage for the 7th World Trade Center in October 2000 from Master Insurance and Annuity Associations.
In July 2002, Blackstone completed a fundraiser for a $ 6.45 billion private equity fund, Blackstone Capital Partners IV, the largest private equity fund ever proposed to date. More than $ 4 billion of capital was raised in late 2001 and Blackstone was able to secure the remaining commitments despite poor market conditions.
With huge amounts of capital in his new fund, Blackstone is one of a handful of private equity investors capable of completing big deals under adverse conditions from the 2000s recession. At the end of 2002, Blackstone, along with Thomas H. Lee Partners and Bain Capital, acquired Houghton Mifflin Company for $ 1.28 billion. The transaction is one of the first major club deals, completed since the fall of the Dot-com bubble.
In 2002, Hamilton E. James joined Blackstone's global alternative asset manager, where he currently serves as president and chief operating officer. He also serves on the executive committee and corporate management, and the board of directors. In late 2002, Blackstone remained actively acquiring TRW Automotive in the purchase of $ 4.7 billion, the largest private equity agreement announced that year (the deal was completed in early 2003). TRW's parents were acquired by Northrop Grumman, while Blackstone purchased its automotive component business, a major supplier of automotive systems. Blackstone also bought a majority stake in Columbia House, a music purchasing club, in mid-2002.
Blackstone made significant investments in the Financial Insurance Company (FGIC), a monoline bond insurer with the PMI Group, The Cypress Group and CIVC Partners. FGIC suffered heavy losses, along with other bond insurers in the 2008 credit crunch.
Two years later, in 2005, Blackstone was one of seven private equity firms involved in purchasing SunGard in a $ 11.3 billion deal. Blackstone's partners in the acquisition are Silver Lake Partners, Bain Capital, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts, Providence Equity Partners, and TPG Capital. It represents the largest leveraged purchase completed since the takeover of RJR Nabisco in the late 1980s by utilizing a purchase boom. Also, at the time of its announcement, SunGard will be the largest purchases of technology companies in history, a distinction to be handed over to the purchase of Freescale Semiconductor. The SunGard transaction is also important in the number of companies involved in the deal, the biggest club deal being finalized at the time. The involvement of seven companies in the consortium was criticized by investors in private equity which assumed that cross ownership among firms was generally uninteresting.
In 2006, Blackstone launched a long/short-term equity hedge fund business, Kailix Advisors. According to Blackstone, on September 30, 2008, Kailix Advisers had $ 1.9 billion in assets under management. In December 2008, Blackstone announced that Kailix would be separated into its management team to form a new fund as an independent entity backed by Blackstone.
While Blackstone is active on the investment side of the company, he is also busy pursuing real estate investing. Blackstone acquired Prime Hospitality and Extended Stay America in 2004. Blackstone followed this investment with the acquisition of La Quinta Inns & amp; Suites in 2005. Blackstone's largest deal, the purchase of Hilton Hotel Corporation took place in 2007. Extended Stay Hotels were sold to The Lightstone Group in July 2007 and Prime Hospitality's Wellesley Inns folded into La Quinta. La Quinta Inns & amp; Suite went public in 2014 and is now controlled by La Quinta Holdings as the parent organization.
Boom Buy (2005-2007)
During the boom of purchase in 2006 and 2007, Blackstone completed some of the largest leveraged purchases. The most important Blackstone transactions during this period include the following:
Initial public offering in 2007
In 2004, Blackstone has been exploring the possibility of creating a business development firm (BDC), Blackridge Investments, similar to a vehicle pursued by Apollo Management. However, Blackstone failed to raise capital through an initial public offering early that summer, and the project was suspended. He also plans to raise funds at the Amsterdam stock exchange in 2006, but his rival Kohlberg Kravis Roberts & Co., launched a $ 5 billion fund there that absorbed all requests for the fund, and Blackstone left the project.
In 2007, Blackstone acquired Alliant Insurance Services, an insurance brokerage company. The company is sold to Kohlberg Kravis Roberts in 2012.
On June 21, 2007, Blackstone became a public company through an initial public offering, selling a 12.3% stake in the company of $ 4.13 billion, the largest US IPO since 2002.
2008 to 2010
During the 2007-2008 financial crisis, Blackstone managed to close just a few deals. In January 2008, Blackstone made a small joint investment with TPG Capital and Apollo Management in the purchase of Harrah's Entertainment, although the transaction was announced during the share purchase period. Other important investments Blackstone completed in 2008 and 2009 included AlliedBarton, Performance Food Group, Apria Healthcare and CMS Computers.
In July 2008, Blackstone, along with NBC Universal and Bain Capital acquired The Weather Channel from Landmark Communications for $ 3.5 billion. By 2015, digital assets sold to IBM for $ 2 billion. In 2018, the rest of the company was sold to Byron Allen for $ 300 million.
In December 2009, Blackstone acquired Busch Entertainment Corporation from Anheuser-Busch InBev for $ 2.9 billion.
In November 2013, Merlin Entertainments, partly owned by Blackstone Group, became a public company through an initial public offering on the London Stock Exchange.
In August 2010, Blackstone announced it would buy Dynegy, an energy company, for nearly $ 5 billion; However, the acquisition was suspended in November 2010.
In 2013, Bloomberg News revealed how Blackstone Group conducted its own transactions after its affiliates GSO Capital Partners bought debt and credit default swaps at Codere SA, Spanish betting, online gambling, and game companies.
In the first half of 2013, Blackstone GSO and other companies then purchased a bank loan of EUR100 million (through secondary market) that Codere already owned in the books, and then convinced Codere to delay the repayment of debts related to the mentioned default credit exchange above. The delay triggered the CDS, generating a profit of $ 18.7 million for the GSO.
The GSO Director maintains a step with "Codere (working with us...) should trigger credit default swaps, because that is the only way to force certain bondholders to negotiate." and blame investors for credit default swaps for losing them:
Unlike Blackstone, which invests directly into Codere, these financial investors [of hedge funds using credit default swaps] are not in tune with Codere's interests, but rather than through the use of credit default swaps, they bet when the Company will fail...] not interested in match results.
Leadership
Executive
- Stephen A. Schwarzman : Chairman, CEO & amp; Co-Founder
- Jonathan D. Gray : President & amp; COO
- Hamilton E. James : Vice Chairman of the Executive
- J. Tomilson Hill : Vice Chairman & amp; Chairman of the Hedge Fund Solution group, Blackstone Alternative Asset Management (BAAMÃ,®)
- Joseph Baratta
- David S. Blitzer : Head of Tactical Opportunity
- David L. Calhoun : Head of Operations Personal Equity Portfolio
- Kenneth Caplan : Head of Global Real Estate Joint
- Michael S. Chae : CFO
- Bennett J. Goodman : Founding Partner of GSO Capital Partners
- John G. Finley : CLO
- Kathleen McCarthy : Head of Global Real Estate Joint
- Joan Solotar : Head of Personal & amp; External Relations
Board of Directors
- Stephen A. Schwarzman: Chairman of the Board of Directors and the Executive Committee
- Hamilton E. James: Member of the Executive Committee
- Jonathan D. Gray: Member of the Executive Committee
- J. Tomilson Hill: Member of the Executive Committee
- Bennett J. Goodman: Member of the Executive Committee
- James W. Breyer: Independent Director & amp; Member of Audit Committee and Conflict Committee
- Rochelle B. Lazarus: Independent Director & amp; Member of Audit Committee and Conflict Committee
- Jay O. Light: Independent Director & amp; Member of Audit Committee and Conflict Committee
- Your Honorable Brian Mulroney: Independent Director
- William G. Parrett: Independent Director & amp; Chairman of the Audit Committee and Conflict Committee
See also
- List of outdoor industry holding companies
- List of venture capital firms
References
External links
- Official website
Source of the article : Wikipedia
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