The “good times” for private equity firms are just beginning despite a dearth of deal activity according to Blackstone Group president Tony James.
James told Bloomberg TV that factors such as the US economic recovery just beginning, the stabilisation of Europe and a rebounding China all point to those “good times” continuing for quite a while.
But that statement comes amid a 16 per cent drop in the number of private equity deals announced this year compared to the same period in 2012, something for which James did not have an explanation.
He said, “There’s just not much out there to buy. There aren’t many corporate sellers — why that is, we can speculate — but there just aren’t.”
James also told Bloomberg he was disturbed that markets had not reacted more negatively to the potential impending breach of the US debt ceiling, saying it was “one of the most dangerous things about this cycle”.
He said, “If you can push it to the limit, there’s a high possibility of miscalculation.”
Blackstone reported a significant increase in earnings and revenues for the second quarter as its assets under management reached a record level.
The New York-headquartered firm’s economic net income more than tripled to $703m, while distributable earnings climbed 73 per cent to $338m.
Blackstone said the results were driven by strong fund performance, which led to a more than fivefold increase in total performance fees to $258m from $68m in the second quarter of 2012.
In the year to date, the firm has generated performance fees of $577m, which is nearly seven times the $86m posted a year earlier.
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