17 November 2015

We are Going to Bail Out These Motherf%$#ers Too

The private equity group Blackstone is now the largest private owner of real-estate in the world:
Blackstone has grown its size nearly four-fold since its 2007 IPO.

But the biggest private equity firm on Wall Street has seen even greater growth in its real estate division, which has expanded from a $17.7 billion business when Steve Schwarzman took his company public to one that today manages nearly $100 billion worth of property.

Steve Schwarzman is America's landlord, now, and he's not afraid to acknowledge it.

"We’re now, we believe, the largest owner of real estate in the world," he told Business Insider in an interview at his company's Park Avenue headquarters in midtown Manhattan.

"We have a performance record that is… pretty much in a league of our own, we’ve compounded [returns of] around 18% after fees. We’ve had almost no losses of any type."
They went into real estate after the crash, which was the bottom of the market.

They have been making insane margins, which means insane risk, though they probably do not realize this, 

Then this game of Jenga ends with a crash comes tumbling down, and it will, Blackstone will be too big to fail.

It's already too big to fail.

And the rest of us are going to have to bail them out.


Anonymous said...

BHYIX...Mathew, what are you trying to do? Have them both...both suffering a little. This will help. What is so wrong with that?

Matthew Saroff said...

What's wrong is that the people who are driving the company into the ditch get to keep their yachts, and we as taxpayers end up paying for it.

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