Blackstone Brings in Byron Wien, Wants To Sell Debt (BX)

By Douglas A. McIntyre Updated Apr 27, 5:46PM EDT · Published Aug 12, 4:25PM EDT

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The Blackstone Group L.P. (NYSE: BX) had a fairly busy day. It seems that reports of the death of private equity may have been exaggerated. The company had two key announcements today: it brought on renowned economist and strategist Byron Wien and it said it was raising cash via a debt offering.
Wien is joining Blackstone as Vice Chairman of Blackstone Advisory Services after having served as Chief Investment Strategist for Pequot Capital and had before that spent some 21 years as Chief Investment Strategist for Morgan Stanley. Blackstone said he will act as a senior adviser both to the firm and to its clients in analyzing economic, social and political trends to determine the direction of financial markets and thus helping guide investment and strategic decisions.

While we do not have a figure yet, but Blackstone announced its intention to offer senior notes of Blackstone Holdings Finance Co. L.L.C., its indirect subsidiary. The company said that the notes will be guaranteed by The Blackstone Group L.P. and its indirect subsidiaries and it intends to use the proceeds for general corporate purposes. These won’t be open to Joe Public as these are under Rule 144A (private placement) and will be sold to qualified institutional buyers in the United States and under Regulation S to investors outside the U.S. We have heard figures of the size of the offering already, but we’d consider those numbers as nothing more than hearsay until something formal has been seen.

On a separate note, Blackstone is supposed to have yet another private equity fund that has been in the process of being raised and has either closed or is set to close soon. The talk we have read is that it could be north of $10 billion, although consider that figure as hearsay until formal data is released. We started noticing back in 2007 how many funds were set to close with a large amount and closed with a smaller amount. Some did not even close at all at other private equity firms.

As far as the death of private equity, it is more likely that it has been on hold from the economy and from lending. Another aspect is that there is still the notion that there is a public war on wealth and the display of wealth. We still think that private equity firms will be using their own clients’ capital rather than getting leveraged capital from the banks as there is billions upon billions coming due in the coming years from the wave of borrowings that took place in recent years.

JON C. OGG
AUGUST 12, 2009

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.