Blackstone is getting rid of its advisory business.
The giant investment management firm announced today that it will spin off its financial and strategic advisory businesses, restructuring and reorganization advisory services, and its Park Hill fund placement businesses.
The spun-off parts of the business will merge with the independent advisory firm PJT Partners, headed by Paul Taubman, in a transaction that’s expected to close sometime in 2015. Taubman started PJT last year after a nearly 30-year career at Morgan Stanley.
Blackstone shareholders will own roughly 65% of the new company and Taubman and his partners will get about 35%. Taubman will become the chairman and CEO of the new entity.
The split appears to come out of worries over conflicts of interest between Blackstone’s advisory and investing businesses.
In a statement, Blackstone’s CEO Stephen Schwarzman mentioned worries about Blackstone’s size. “As the largest alternative asset manager in the world, and with our investing areas considerably broader and larger than even a few years ago, we have not been free to aggressively grow our advisory businesses further out of concern for potential conflicts,” he said.
The statement also noted that the transaction is meant to be tax-free for both Blackstone and its shareholders.