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Quote of the Week: Blackstone’s Energy Fund Gets Returns

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June 14, 2013

“We have a large private equity fund. The returns we’re getting on our BCP VI fund are really strong…[they have] been 30s — 20s, net 20s. For the investments we’re making in Private Equity that’s not so bad for those of you in the investment business. Our energy fund is only compounding at the moment at around 88%, and that is not a typo. There aren’t many people who compound at 88%. … Our historic record in energy has been a 40% compound rate of return.”

 

Who said it:  Stephen Allen Schwarzman – Co-Founder, Chairman of Blackstone Group Management L.L.C, Chief Executive Officer and Chairman of Executive Committee

 

In Context: The quote about the outstanding PE returns and high rate of return on a USD 2.5 billion energy fund are from a transcript of Schwarzman speaking to attendees of the Morgan Stanley Financials Conference 2013 this week. Schwarzman was answering a question about where he sees good investment opportunities and the quote above was part of that response. Energy, as indicated by the quote above, is where Blackstone is targeting investment due to a number of reasons, which Schwarzman details. Other areas where Blackstone sees growth in Detroit’s auto industry, as well as housing and real estate, and while there are opportunities in Europe and Asia, the deals are under constraints and made with an informed view, which he generously outlines at length in the transcript. Fund Evaluation Group has a good report on the private energy investing universe with historical returns  for those of you interested in learning more. (Image Source: YouTube Forbes Summit)

 

Where we found it: Seeking Alpha

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