Blackstone Bullish on Deal Flow

But the pipeline for deals was strong, as Blackstone said transaction activity was up of late, and that $1.3 billion of limited partner capital was committed in the third quarter, though not yet drawn down. Commentary in the press release promised more wheeling and dealing -- both new deals and exits, the latter surely welcome news to limited partners anxious for returns on their investments.

"There has been some improvement in lending markets, with lower borrowing rates and an improved willingness on the part of banks to increase lending," Blackstone said. "Access to equity capital markets has improved and volumes of both IPOs and secondary equity markets have increased considerably throughout 2009. If these favorable trends are sustained, Blackstone's funds could participate in an increased number of acquisitions and dispositions."

The tempered resurgence of the IPO market in 2009 has emboldened Blackstone as Schwarzman said in mid-October, according to numerous published reports, that the company was prepping IPOs for eight of its portfolio companies in the near future. According to Thomson Reuters data, the average performance of the 42 IPOs that have debuted in 2009 was an appreciation of 7.2% through Oct. 30.

JMP Securities reiterated its market perform rating on Blackstone shares following the report, calling the performance "a good, solid beat" with most of the upside coming from the company's real estate private equity and credit and marketable alternatives businesses.

The firm also noted advisory revenues, though down on a year-over-year basis, did well in the latest quarter, coming in at $97.3 million, well ahead of JMP's estimate of $80.5 million, and higher on a sequential basis. Blackstone's restructuring and reorganization advisory unit has done well with so many companies paring down in the past year.

Written by Michael Baron in New York.

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