Steve Schwarzman really is a raging bull. Never mind that Blackstone posted its lowest quarterly profit since its IPO. Today he said he thinks Blackstone will make a lot of acquisitions soon. Why? Lower prices. Gotta love that a sextagenarian billionaire still appreciates a sale.
“We’re quite optimistic about our new prospects,” Schwarzman said at a conference today in New York sponsored by Merrill Lynch & Co. “We are in extremely strong financial position.”
Whoa, spooky! Does that sound like John McCain’s infamous “the fundamentals of our economy are strong” statement to anyone else?
Schwarzman said the biggest profits for private-equity investors come during the worst economic times, pointing to recessions in the early 1990s and 2001, when investors earned average annual returns of around 30 per cent. The global credit crisis that took hold almost 18 months ago has stalled large- scale acquisitions, forcing Blackstone to focus on smaller deals that require less debt.
“When you get all that debt, the prices go up,” Schwarzman, 61, said. When the prices are low, you can make a tremendous amount of money.”
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