Blackstone Group Posts Worse-Than-Expected Quarterly Loss

Blackstone Group posted a worse-than-expected quarterly loss on Thursday as market declines hit the value of the private equity firm’s investments, forcing it to book a huge accounting loss. Its net loss, which measures operating performance, was $342 million, compared with a profit of $339 million a year earlier. Adjusted ENI was a loss of 31 […]

Blackstone Posts Loss, Hit By Market Decline

(Reuters) – Blackstone Group posted a worse-than-expected quarterly loss on Thursday as market declines hit the value of the private equity firm’s investments, forcing it to book a huge accounting loss.

But Blackstone said assets under management on which it earns management fees increased during the quarter, operating performance of its portfolio companies and properties was strong, and U.S. and European markets had rebounded since Sept. 30.

The company said it had record $33.4 billion of “dry powder,” or capital available to invest, up from $31.4 billion in the second quarter, and expected its latest real estate fund to raise more than $10 billion.

Rubenstein, Schwarzman Downbeat on U.S. Economy

(Reuters) – The heads of two of the world’s most powerful private equity firms issued a dire report on the U.S. economy on Wednesday, signaling problems for political leaders and their own firms’ ability to realize profit on their portfolios.

“We never really emerged from the last recession,” Carlyle Group co-founder David Rubenstein said at a breakfast session at Lincoln Center that also featured Blackstone Group Chief Executive Stephen Schwarzman.

“It will last a few more years before we get unemployment to a level that is tolerable,” Rubenstein said.

Week’s Top Posts Focus on IRRs for UC and Florida, Q3’s Most Active Acquirors, Solyndra Fallout

Time to catch up on the stories your colleagues found most compelling on peHUB this week. Here are the top 10 posts that garnered the most pageviews from regular readers from Sept. 19 to Sept. 23.

One: Trouble Making Ends Meet: Top 10 Cash Returning Funds In Cal Regents’ Venture Portfolio (Slideshow)by Mark Boslet
Two: Slideshow: Face Scrubbers, Balloon Trips: 16 at CalPERS Face Fines for Alleged Gift Violations (subscribers only) — by Gregory Roth
Three: Slideshow: Q3’s Most Active Buyersby Bernard Vaughan
Four: Slideshow: Top-Performing PE/VC Funds for State of Floridaby David Toll
Five: Wringing Money from a Flagging Venture Fund — for a Price — by Connie Loizos
Six: Blackstone Looks to Advise Startupsby Luisa Beltran
Seven: Pressure on Solyndra Backers Intensifiesby Roberta Rampton, Reuters
Eight: Soros, Schwarzman Move Up On Forbes 400 Richest Listby Luisa Beltran
Nine: Obama Pitches Changes to Carried Interest; PEGCC Rebuts “Buffett Rule”by Luisa Beltran
Ten: MassPRIM Loses Second PE Managerby Gregory Roth

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Black Gives Himself 60th Birthday Party of Bad Taste

Leon Black has apparently learned nothing from Stephen Schwarzman. In 2007, Blackstone CEO Schwarzman famously gave himself a 60th birthday party that cemented his reputation as the “villain of private equity.” Schwarzman’s $3 million bash, held at the Park Avenue Armory, featured Martin Short as the m.c., while Pattie LaBelle — leading the Abyssinian Baptist […]

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Blackstone CEO Stephen Schwarzman Gets Richer

Stephen Schwarzman, the Blackstone Group’s chairman and CEO, has gotten a little richer.

Schwarzman’s 23% stake in Blackstone fully vested this month. The CEO owns 231 million Blackstone units but the last chunk, 38 million, vested on June 21, I’m told. Shares of Blackstone were up 35 cents to $16.73 in mid-day trading Thursday. So, Schwarzman’s stake is now worth roughly $3.9 billion.

Blackstone went public in June 2007, raising $4.13 billion. Employees of the buyout shop owned 75% of the company after the IPO. Schwarzman has the largest stake and he hasn’t sold any units, I’m told. The CEO is known for his lavish parties, but we think this one is worthy of another fiesta. Congrats, Steve!

Putin Pitches Blackstone, Other PE Firms on Investing in Russia

(Reuters) – On an overcast day in May, a clutch of the world’s most powerful investors gathered in a 19th-century mansion in Moscow to hear a proposition from Vladimir Putin: invest in Russia, and we will invest with you.

For forty minutes at the government’s Vozdvizhenka guest house, the prime minister addressed private equity and sovereign wealth funds representing a combined $2 trillion of wealth. He was pitching a plan to launch a $10 billion state-backed fund that Russia hopes can win over those foreign investors who still regard the country as a no-go zone.

There was “a lot of back and forth and some tough

Question of the Week: Are PE Execs Overpaid? — UPDATED

Create your free online surveys with SurveyMonkey, the world’s leading questionnaire tool.

This week FINS reported that buyout shops are raiding investment banks for relatively inexperienced analysts. Buyout shops typically pick up execs from two-year analyst programs at IBs. But this year, PE firms are scooping up candidates less than a year after they graduate from college, according to FINS.

These fresh grads are getting good money. Recent offers for analysts guarantee $220,000 to $250,000 a year, though highly coveted workers are getting more than $300,000, FINS says.

This made me wonder: With lower-tier employees taking home such big paychecks, how much are PE executives making?

Stephen Schwarzman, the Blackstone Group’s chairman and CEO, earned

Top 10 Hub Posts This Week

Want to catch up on what your colleagues found most interesting on peHUB this week? Here are the posts written by our staff that garnered the most pageviews from March 7 to March 11.

1. Disqus to Facebook: “We Aren’t Shaking In Our Boots” – by Connie Loizos.

2. Is Savvis Finally Up for Sale? Tech Co. Said to Have Hired Qatalyst – by Luisa Beltran.

3. Schwarzman, At $5.9B, Among Richest LBO Pros (Well Ahead Of Kravis) – by Steve Bills.

4. Summit Partners Raising $3B Growth Equity, $450M Venture Funds – by Mark Boslet.

5. Doerr, Moritz Make Forbes’ Billionaire List; Will They Make the Resurrected Midas List, Too? – by Alastair Goldfisher.

6. Israeli Venture Funds Raised Zero Dollars in 2010; The Situation is “Critical” – by Connie Loizos.

7. HCA Doesn’t Look So Bad. Here’s The Top 10 PE-backed IPOs – by Luisa Beltran.

8. It Took Two Years But Wynnchurch’s Third Fund Comes In at $603M – by Luisa Beltran.

9. This Anti-Registration Campaign Might Have Legs – by Bernard Vaughan.

10. Sequoia, Google Ventures Join $32M Round For HubSpot – by Mark Boslet.

peHub’s 2011 Predictions

Prognosticators and pundits are hurling every prediction and possibility on topics ranging from the economy to professional sports to the Academy Awards for 2011, so we here at peHub thought we’d weigh in with a few of our own. Just don’t bet the farm on these ones to come to fruition.

“Chooch 2—North To Alaska” becomes a surprise Memorial Day hit, more than earning enough money to pay off all of investor Steven Rattner’s fines.

Google will give two more companies instant, overnight desirability and massive fundraising clout by being rejected as a bidder. Again.

Warren Buffett gets caught skinny-dipping on the Jersey Shore, disproving his saying that it’s only when the tide goes out that you know who’s not wearing a bathing suit.

Schwarzman Moves To Europe As Blackstone Grows

Stephen Schwarzman, the chief executive of Blackstone Group, will move to Europe early next year to better manage his firms international growth, Reuters reported. Schwarzman will reportedly live abroad temporarily, for a period of months, and has already spent more than half of 2010 overseas. Blackstone recently raised a $15 billion private equity fund, a significant part of which will likely be invested in Asia. It is also raising a yuan-denominated fund for China, Reuters said.

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