Blackstone P.E. Chief Decries Secondary Deals

Oct 25 2013 | 11:26am ET

The Blackstone Group's private-equity chief does not like what he's seeing in his industry these days.

"Right now in Europe, something like 75% of deals above US$500 million in enterprise value are sponsors selling to each other," Joseph Baratta said at a Bloomberg summit in London. "That's not a sign of health in our market."

Secondary buyouts have totaled US$29.9 billion in Western Europe this year, compared to US$27.6 billion in primary buyouts, according to Allen & Overy.

"I'm rooting for a large-scale resumption of corporate M&A because that's the lifeblood of our business in private equity," Baratta said. "Large corporate mergers result in non-core asset sales or some corporations who don't have ready access to capital need our help. That's a healthy functioning private-equity market."

"The way the private-equity market in Europe is operating is problematic," Baratta continued. "There is a lot of capital, there is no corporate M&A of any substance, there is very little primary private-equity deal flow. And these is this generic belief that Europe is out of favor."

Baratta said bluntly that p.e. was not the place to be in Europe right now.

"Europe, in certain asset classes, presents a once-in-a-generation opportunity," he said. "Unfortunately, it's not in private equity."


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.