Blackstone Group President Tony James channeled a little Blondie in this morning’s media call in Blackstone’s Q4 earnings report. The PE mogul’s positive outlook was underscored by caution on things like fundraising and exits, saying, “One way or another,” Blackstone will find what it’s aiming for. (No mention of “getcha getcha getcha,” unfortunately.)
Looking at exits, James said Blackstone has managed to return $1 billion in liquidity to LPs since the fall of last year. The firm expects realizations to total $3 billion to $4 billion over the first half of 2010. That’s some optimism against the odds, considering the firm’s recent string of false starts. The firm cancelled its $1.78 billion IPO of Travelport, and postponed its IPO of Merlin Entertainments. Even the IPO of Graham Packaging was scaled back from its original pricing.
Reuters reporter Megan Davies asked about the government of Ghana’s decision to block Blackstone and Warburg Pincus’ $4 billion sale of Kosmos Energy, a Nigerian oil field. James was once again optimistic. “One way or another, we’ll work something out, but it’s not without doubt,” he said.
Looking at fundraising, James was equally positive. Blackstone Capital Partners IV, the firm’s traditional LBO fund, remains set to close on June 30, despite coming up short on its already-reduced target of $15 billion. January reports placed the fund at $9 billion in commitments. James said “Things are starting to move in positive directions there.”
Surprisingly, James said Blackstone raised $15 billion in 2009, a sum that has to include real estate, debt funds, and hedge funds. The reason Blackstone has been able to raise that money, he said, was, “partly because we don’t use placement agents, and partly because we’ve got a big fund and its like we’ve got one of those battle ships that when it moves, everyone else gets out of the way.” I wonder if LPs agree with that statement. Seems to me they weren’t moving for much last year, especially big “battleship-style” mega-funds.
James also commented on the firms renmibi fund, saying Blackstone had secured three total commitments. The fund cannot be larger than around $730 million, he said.
On debt refinancing, James said the banks are basically falling over themselves to amend Blackstone’s portfolio companies’ debt. “We’re at the point where second and third tier banks are knocking on our door saying, ‘We have more deposits. Do you have some loans that we can participate in?’ That’s the first time we’ve seen that, ever,” he said. Blackstone has already extended the majority of its companies’ debt.
And, for those of you who find earnings calls tedious, here was one bizarre and silly interaction:
Reporter: Hi Tony, I saw your recent video interview with the FT.
TJ: Oh, yeah, that was a scary video.
Reporter: Scary? Why do you say that?
TJ: I just cringed when I watched it.
Reporter: Is that because you feel you were too open?
TJ: No, I think I just looked like a bozo. (uproarious laughter in background)
Reporter: (Refusing to recognize the joke) Well, I wish you would have done the interview with me instead of the FT.
Full earnings details: