As a CFO, I never market, or make a pitch. My approach is : give people the facts and let them make their own decisions.
Who said it: Laurence Tosi, Blackstone Group Chief Financial Officer
In Context: Laurence Tosi is the CFO of one of a handful of publicly traded PE giants in the US. He not only is involved in Blackstone’s busy dealflow (acquisitions and exits), he oversees four divisional CFO’s and about 65 CFOs in underlying portfolio companies and business units. Tosi was in the news back in 2011 when Apple tried to poach him from Blackstone. The quote above is from an interview published this week by Bloomberg conferences where he spoke for 30 minutes about his experience after joining Blackstone post-IPO. It was a challenge because potential buyers of the stock did not understand the private equity business.
He says investors would look at the financial reports which showed USD 85 billion in assets, at the time, and a lean payroll, 800 employees at the time, and say, “It is great. What is it? I don’t know, but it’s great!” In the meantime, he’s learned how to communicate the PE story by delivering the facts.
Blackstone now has more than USD 272 billion in assets under management as of Mar 2014. His view on M&A between companies is that the rash of deals underway right now should have been done two years ago when prices were lower.
He said, “The time to buy is when growth is scarce”, but he conceded how hard it is to get businesses to take that kind of risk when the cycle is not clearly bottoming out. He still believes Blackstone stock is undervalued compared to other asset managers, given his company’s 50% profit margin, 25% growth rate, and high dividend payouts to shareholders.
Where we found it: Bloomberg