Blackstone is big. Very big.
Founded in 1985, the company has grown from a modest mergers and acquisition firm into a mammoth money management business that oversees $500B+ in assets. It deploys capital across a dozen investment strategies, including private equity, hedge funds, infrastructure, energy, and real estate.
With a market cap of $63B, it’s the world’s largest publicly traded PE firm, handily besting the likes of KKR ($30B) and Apollo Global Management ($21B).
And it’s been very busy this summer
Befitting its wide scope, Blackstone was linked to 2 deals last week — one acquisition and one sale — that could not be more different:
- A joint ~$18B bid for the railroad operator, Kansas City Southern
- A prospective listing of the dating app, Bumble, for $6-8B — a value that would double the firm’s 2019 majority stake investment
This just scratches the surface of other wheelings and dealings the firm has been involved with this summer:
- It closed a new life-sciences fund at $4.6B
- It closed a secondary infrastructure fund at $3.75B
- It acquired the genealogy company Ancestry for $4.7B
- It acquired Takeda Consumer Healthcare for ~$2.3B
- It purchased a 49% stake in a portfolio of Hollywood movie lots for $1.49B
- It joined a $200m investment round for the oat-milk maker, Oatly
This isn’t the first time Blackstone has done major deals during a crisis: it largely created the single-family home rental market after the 2008-09 financial crisis.
Private equity coffers continue to fill up
PE firms have faced increased scrutiny in recent years for deals that left several well-known corporations in bankruptcy (Toys ‘R Us, Sears).
Despite this, the industry keeps raising more money. In Q2 2020, Blackstone reported an inflow of $20B, and its dealmaking dry powder (cash + other liquid securities) is currently sitting at $100B+.
Even with its weighty fees, the world’s biggest pension funds, sovereign wealth funds, and college endowments turn to PE firms for their management skills and long-term investment horizons.
With the US Department of Labor potentially allowing PE firms to tap 401(k) plans, funds like Blackstone may only grow bigger.
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