Wall Street sage Byron Wien, hired this week by Blackstone, sees “big opportunities brewing” for the private equity giant in private equity, real estate and distressed.
“They’ve got a tremendous pool of assets to deploy and the opportunities couldn’t be greater,” Wien said, in a phone chat with Reuters a day after his appointment.
“One of the reasons that I took this job is that I saw so much opportunity in all the areas they’re operating,” said Wien, who at 76 has had a long career analyzing markets at some of Wall Street’s most powerful firms.
Wien will be reporting to Blackstone’s CEO Steve Schwarzman and COO Tony James, rather than any particular area or fund.
“I’m going to be trying to determine how social, political and economic factors influence the financial markets and I expect that my commentary will be used across all the areas of the firm — asset management, real estate, private equity and also the advisory business,” Wien said.
Among his predictions:
He doesn’t think commercial real estate has bottomed yet, but thinks housing is in the process of bottoming.
He’s bullish about the economy — his view is the United States is on its way out of recession and that it will have a positive quarter before the end of the year.
“My view is that the economy has probably turned, and I think there will be a few quarters coming up that will surprise favourably because the comparisons will be easy and there will be some inventory rebuilding.”
That could be positive for distressed investments, he said. “My view is that as a result some current distressed is going to perform pretty well,” he said.
But he also sounded a note of caution, saying he’s concerned about what will happen in 2010 when the stimulus wears off.
He’s still bullish on credit: “I have been very bullish on the whole credit area all year… I don’t think that’s over yet,” he said.
He thinks banks will only really start lending again when they get toxic assets off their balance sheets — although he couldn’t exactly predict when. “I hope that will be resolved over the next few months but I would have said that 3 months ago,” he added. A revitalization in the lending markets is key for private equity firms like Blackstone to be able to ink leveraged buyout deals of any significant size.
Still, he thinks there are good opportunities for Blackstone’s private equity funds. “There are a lot of companies available at attractive prices,” he said.
Wien, who found his new job only a few months after his previous employer, hedge fund firm Pequot Capital Management, went out of business, is partly famous for his annual forecast of ten surprises for the year. He’s planning on continuing that. “It isn’t broken and I dont want to fix it,” he quipped. He starts at Blackstone in September.
This post originally appeared at Reuters DealZone.