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 www.reuters.com/davos (Reporting by Emma Thomasson, editing by Mike Peacock)