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

Change In 'Accredited Investor' Definition Could Hurt Crowdfunding Space

Jul 25 2014 | 8:14am ET

The Securities and Exchange Commission is considering changes to its 30-year-old...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note