Blackstone fees increase as income slumps in 1Q

The asset manager and private equity investor is likely to struggle in finding a near-term solution to problems plaguing its primary business model

Greggory Warren, CFA 7 May, 2009 | 1:11PM
Facebook Twitter LinkedIn

We're maintaining our fair value estimate for The Blackstone Group following the release of first-quarter earnings by the firm. The company continues to struggle with the disruption in the credit and equity markets as well as the dramatic slowdown in major economies around the globe.

With lenders continuing to severely restrict access to debt, it has been near impossible for Blackstone to initiate any kind of leveraged buyouts in either its corporate private-equity or real estate segments. It has also been more difficult (and more expensive) to roll over debt that had been used to complete past deals, given that credit standards and costs are significantly higher.

With the equity markets continuing to be less than receptive to new offerings (especially those that Blackstone would like to eventually take public), and the credit markets still far too expensive for debt-driven deals, we don't envision Blackstone finding a near-term solution to the problems plaguing its primary business model.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Greggory Warren, CFA  Greggory Warren, CFA, is a senior stock analyst with Morningstar.