Blackstone: Bank Assets Back on the Market in ’10-’11

DAVOS, Switzerland (Reuters) – Private-equity company Blackstone Group LP (BX.N) sees a wave of bank consolidation after bad assets are shaken out, senior managing director John Studzinski said on Thursday.

“We’re going to have to go through a phase with the banks where we acknowledge good bank, bad bank and then after that there may well be a phase of consolidation,” Studzinski told Reuters at the annual meeting of the World Economic Forum.

“That may not be until 2010 and 2011 but there will be a recirculation of bank capital,” he said.

Blackstone shares are trading at around $5, compared with their June 2007 initial public offering price of $31.

The firm unveiled a $509 million third-quarter loss in November and said it had cut the value of a number of the companies in its portfolio as equity markets tumbled.

Blackstone has warned that unless market conditions improve markedly, its fourth-quarter payout might be significantly lower than the 30 cents a unit it pays now, or it might have “no distribution at all.”

But the company has said that it expected sufficient cashflow to meet a distribution of $1.20 per public unit for 2009.

For full coverage, blogs and TV from Davos go to (Reporting by Emma Thomasson, editing by Mike Peacock)