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| Friday, November 20, 2009 |
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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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March 2, 2009 3:57 PM ET
(Reuters) — Private equity firm Blackstone Group wrote down the value of its Buyout Fund V by 35% for 2008, a source who has seen a letter it sent to investors said on Monday. Blackstone reported a fourth-quarter loss of $827.1 million on Friday and said it wrote down the value of its private equity portfolio by 20% for the quarter. The company later on Friday sent out a letter to investors in its funds detailing the performances of the individual funds, the source, said. The source requested anonymity because the letter is confidential. Blackstone declined to comment on the letter. According to the source, the letter detailed the write-downs and write-ups on five private equity funds. In aggregate, the funds were written down 31% for the year and 20% for the quarter. That is lower than the public market. For the year, the Dow Jones industrial average fell 33.8% and the Standard & Poor's 500 Index dropped 38.5%. The funds are: Blackstone Fund V, a $21.7 billion fund it finished raising in August 2007; Fund IV, raised in 2002, with $6.45 billion; Fund III, a $4 billion fund raised in 1997; and Fund II. It also detailed a communications and media fund. Blackstone V was written down 35%, said the source. Fund V has investments including Nielsen Co, Michaels Stores, Alliance Data Systems, Biomet, Freescale Semiconductor, Hilton Hotels and Center Parcs, according to a press release issued by Blackstone at the time the fund finished raising money. Blackstone IV was written down 20%; Blackstone III was written down 17%, and the oldest of the five funds, Blackstone II, was written up by 2%, the source said. The communications and media fund was written down 48%, the source said. Private equity firms are obliged to value their companies as if they were to sell them today, rather than years in the future when they may be sold. The accounting rule known as FAS 157 came into effect for financial years beginning after November 15, 2007. It was unclear the exact methodology Blackstone used for the write-downs. Blackstone is raising its sixth buyout fund, which it said on Friday it expects to start investing in late 2009 or early 2010.
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