Private Equity

Larry Fink, Steve Schwarzman Unite Behind Controversial Position That Even Oil-Rich Countries Can’t Just Go Around Killing Reporters

BlackRock’s Larry Fink and his erstwhile patron Steve Schwarzman of the Blackstone Group don’t agree on much, other than that it was very stupid of the former to sell the latter. Now, there’s a new area of agreement between the two old rivals: That autocratic regimes shouldn’t be allegedly murdering and dismembering journalists, certainly not so soon before a conference they’d like the two of them to attend. BlackRock Chief Executive Larry Fink and Blackstone Group CEO Stephen Schwarzman will no will no longer attend a high profile conference in Saudi Arabia…. Executives from media, technology and financial firms have in the last few days withdrawn from the conference, scheduled for Oct. 23-25, after the disappearance of Saudi journalist Jamal Khashoggi. President-elect Jamie Dimon is also...

Private Equity Firm Acting Like A Private Equity Firm

Here’s how private equity works: A firm buys a company with a lot of borrowed money. The now-p.e.-owned company borrows even more money to repay the p.e. owners. The p.e. firm resells the now-heavily indebted company on to the next sucker. Repeat. In layman’s terms, this is called levering to the hilt. It’s how private equity firms make money: Using leverage to extract as much as they can for themselves and their investors. But it is not the only kind of leverage available to p.e. firms. No! They can lever their leverage, especially when interest rates are laughably low. Leverage, after all, is just debt, and debt is just a contract for money, and contracts have to be negotiated, and the negotiator with more of the other kind of leverage is able to impose more of the terms of the contract ...

Sam Zell Has Never Been Concerned About Getting “More Pussy on The Block” Because Sam Zell Is A Feminist Or Whatever

The #MeToo movement has come for so many old familiar names that we almost forget to remember who it hasn’t come for, until it does. Sam Zell knows what we’re talking about: Real estate investor Sam Zell, asked at a conference Wednesday about gender diversity and the #MeToo movement, said he has promoted women based on merit. Oh? Well, that’s nice… “I never promoted a woman because she was a woman. I never demoted a woman because she was a woman. My issue is what do you do, what do you produce, how do you interrelate to the rest of the business,” Zell, chairman of Equity Group Investments Inc., said at the REITweek investor conference in Manhattan. That’s right, you toxic masculines, everyone’s favorite Keebler Elf turned real estate billionaire is a woke-ass bro! He doesn’t see gender, ju...

Guggenheim CEO Not Enjoying The Dodgers’ First Pennant In 30 Years

(MLB Shop) April was not a good month for Mark Walter. His Los Angeles Dodgers, which came oh so close to giving him his first World Series title in November, sputtered out of the gate with a record even worse than that of their hated rivals in San Francisco. (Things have not gotten much better since.) The SEC’s probe into Guggenheim Partners’ relationship with Bob Diamond grew into a look at Walter’s home-buying practices, including an $85 million pad in Malibu he personally co-owns and a house in Pacific Palisades that his lady friend—who is not his special lady, according to Guggenheim—has been living in. And to top it all off, said lady friend, on-leave Guggenheim global head of internal distribution Alexandra Court, has left to do her own thing. Ms. Court, who went on sabbatical in Ju...

Why Will No One Take Warren Buffett’s Gosh-Darned Money?

Warren Buffett’s idea of ride-sharing. Source: AP Uber is trying to raise all of the money. Warren Buffett has all of the money. Warren Buffett is an elderly luddite who should probably diversify his technology holdings beyond a little startup called Apple. Uber is a technology company that, compared to Apple, is small and startup-y. Uber has a long and growing list of reputational issues. Warren Buffett is widely regarded as a folk cure for corporate reputational issues. Uber uses cars. Warren Buffett has cars. It was a match made in heaven. Until it wasn’t. Warren Buffett earlier this year offered to invest $3 billion in Uber Technologies Inc., but the two sides couldn’t agree on the terms, according to a person familiar with the matter…. Berkshire has a history of investing in troubled ...

Henry Kravis Doesn’t Need Partners, But Would Like More Money

There are some moments where you just know that Wall Street will never be the same. Black Thursday. Black Monday. The repeal of Glass-Steagal. The deaths of Lehman Brothers and Bear Stearns. Goldman Sachs going public. July 1, 2018, will provide just such a moment, when Kohlberg Kravis Roberts abandons its more than four-decade-old partnership structure to become a plain-vanilla corporation. It seems a lot like the Goldman IPO, what with this oldest, toughest and smartest of private-equity shops giving up a key tradition that helped make it so. But it’s actually bigger, as if Goldman, instead of being the last big Wall Street house to go public, had been the first; to date, only Ares Management has taken the plunge among publicly-trading p.e. firms. The other big boys—Apollo, Blackstone, C...

Carlyle Group Pretty Pleased It’s Not The Vanguard Group

Not amused. For those interested in the math, the question of whether active or passive investing is superior has been pretty definitively settled. That is, as long as the math you are interested in is what’s better for investors. If, however, like the Carlyle Group, you are less concerned about making money for clients and more concerned about making it for yourself, well, it’s also pretty definitively settled. Carlyle Group LP reported a first-quarter profit that exceeded Wall Street’s expectations as the value of its portfolio climbed in the face of market volatility…. “The beauty of our business is we don’t buy indexes,” said Carlyle co-Chief Executive Kewsong Lee on a conference call with analysts Tuesday. “I feel pretty good about our chances to continue to outperform on a relative b...

$25 Million Doesn’t Go As Far At A Public High School As it Does At Yale

Who wouldn’t want to gaze upon this on their way to class? By Lishabai Yi (Middle Kingdom Media Ltd.) [CC BY-SA 4.0], via Wikimedia Commons When Blackstone Group capo Steve Schwarzman pledged 0.2% of his fortune to his old high school, he had only two desires: inspiring a new generation of philanthropists to add public schools to their usual beneficiaries of colleges, art museums, ballets and orchestras, and the like, and to ensure a top-notch education for his fellow affluent southeastern Pennsylvanians. Oh, and also to have the school renamed for him, which new name must prominently appear over at least six entrances. And his name on the new science and technology center his money will build, as well, in case people missed the other signs or the one over the school’s football stadium. An...

Tim Geithner Would Be Laughed Out Of A Trump Cabinet Meeting

By Medill DC (Geithner) [CC BY 2.0], via Wikimedia Commons It’s been a decade since the darkest days of the financial crisis, so The Wall Street Journal is taking us on a fun trip down memory lane, checking in with some of the familiar faces of that era. Jimmy Cayne’s still playing bridge, his deputy’s still I-banking somehow, John Thain’s still keeping busy, Kyle Bass still thinks everything sucks and Eric Holder’s still a goddamned hypocrite. Oh yea, and Tim Geither’s still around, too. The mini-profiles often feature some fun tidbits about our old friends, and today’s on Tim Geithner is no different. Since leaving 1500 Pennsylvania, he’s written a book no one read, given speeches no one wants to hear and spent some time in a place no one wants to be: court. Oh, yea, and he’s president o...

Dear Executives and Directors of Travelport Worldwide

My name is Paul Singer. Perhaps you have heard of me? I write letters to people like you with some frequency, and now that my hedge fund, Elliott Management, has just bought a 12% stake in your company, I am writing one to you. Are you aware that Travelport is now worth just half what Blackstone paid for it 12 years ago, and that since Blackstone dumped it onto the unsuspecting public it has created literally no value for shareholders? As such, my private-equity arm would now like to buy the rest of it so as to fire all of you and make your underperforming company not. Barring this, I am happy to hear offers from others who would like to buy Travelport for more than I am willing to pay while still making my 12% investment worthwhile, before presumably firing you all and making your underpe...

Anyone Not Named Steve Schwarzman Or Jon Gray Best Not Get Too Comfortable At Blackstone

(Blackstone Group) Pete Peterson is dead. Tom Hill and Tony James have stepped back. Steve Schwarzman… Well, Steve Schwarzman is still very much in charge. But even he will be replaced someday, probably by the same guy who replaced James. Change is afoot at the Blackstone Group. In January, Blackstone said John McCormick would take over management of the hedge fund business as Tom Hill stepped into the role of the group’s chairman. The firm also recently announced it was promoting Jon Gray to president and chief operating officer. Ken Caplan and Kathleen McCarthy were promoted to global co-heads of real estate. Blackstone’s largest business, credit arm GSO Capital Partners, is not immune to these winds. Indeed, last year, it got a new president, ostensibly to allow the “S” in “GSO,” Tripp ...

Don’t Look Now But Lynn Tilton Is “Bankrupt”

Getty Images “The Diva of Distressed” wants the American legal system to recognize her as distressed.  Colorful New York financier Lynn Tilton has put her Zohar investment funds, a key element of her distressed-debt empire and the subject of several legal battles, into Chapter 11 bankruptcy, with a goal of selling assets or refinancing debt. Firstly “Colorful New York financier” is an apt description for Tilton if you stop at “colorful.” Secondly, based on Lynn’s recent “persecution” by federal authorities and ongoing litigation with…we’ve lost count, the timing of this Chapter 11 filing feels intriguing. Tilton said in papers filed on Sunday night with the U.S. bankruptcy court in Wilmington, Del., that the filing was prompted by litigation with the funds’ current manager, restructuring f...

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