Case (1)：The Blackstone Group’s IPO 1. What are the built-in tensions with a public private equity firm? How does Blackstone’s structure attempt to reconcile them? 2. If you were an LP in Blackstone‚ how would you view the structure Blackstone has put in place to go public? 3. Would you rather be a unitholder in Blackstone or an LP? 4. As a potential employee‚ how you evaluate the Blackstone compensation package against a commensurate offer from a similar large-scale private equity firm that
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The Blackstone Group’s decision to file an initial public offering (IPO) involved the development of the compensation system‚ protection of the limited partners (LP)‚ structure of the public ownership‚ and an accounting transition in order to alleviate problems that would arise. Blackstone was required to establish a new compensation package that addressed partners carried interests as well as compensation for investment professionals and staff members that allowed each party to be no worse off
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“The Blackstone Group: Merlin Entertainment” The Blackstone group‚ founded in New York‚ is one of the largest private equity firms in the world with offices in USA‚ UK‚ Germany‚ France and India. The Blackstone model of investment operation is to invest out of a singel global equity fund so all its investments around the world tap into the same capital pools. One of the most attractive industries to invest for the Blackstone is theme parks and there are a number of reasons for that. The first
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1. Why go public for Blackstone Blackstone’s IPO reflect some of public private equity company’s advantage and also the special need for itself. 2. What are the built-in tensions with a public private equity? How does Blackstone’s attempt to reconcile them? Brief Introduction The Blackstone Group is an American multinational private equity‚ investment banking‚ alternative asset management and financial services corporation based in New York City. Blackstone specializes in private equity‚ creditand
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Key Issue: Lion Capital and Blackstone Group want to prevent third round bidding for Orangina while ensuring that they were not overpaying. Analysis of Lion Capital and Blackstone Partnership: Both Lion Capital and Blackstone are motivated by a strategic partnership because: * Lion Capital would be able to participate in a larger deal‚ such as Orangina thus circumventing the 30% exposure limit. The partnership would also bring credibility to Lion Capital and help in its future marketing
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Shelley Rushing SeaWorld IPO Week 5 SeaWorld Entertainment Inc.‚ was wholly owned by the Blackstone Group L.P.‚ before SeaWorld went public. SeaWorld owns eleven theme parks in the United States and attracts about 24 million visitors (market watch). As noted above they are in the theme park industry just like Disney and Six Flags with a proven business model and plenty of room for growth. It offers strong consumer value proposition and caters to a broad range of guest from all over the world
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The Blackstone IPO 1. If you were a fund LP how would you view the structure Blackstone has put in place to go public? IPO offered Blackstone certain advantages: - Access to the capital markets‚ as a new source of funds. - Blackstone could also use its own stock for the acquisitions. - It changed compensation structure and provided more incentives to junior management and help to keep top employees motivated long-term. Blackstone decided to adopt the MLP
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the built-in tensions with a public private equity firm? How does Blackstone ’s structure attempt to reconcile them? 1. Transparency (disclosures of financial statements) The reason why investors are willing to let the required rate of return decrease is the lower concerns about asymmetric information due to the disclosures of financial statements. In the past‚ in order not to be subjected to Investment Company Act of 1940‚ Blackstone once analyzed its operations and concluded that it was not an investment
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customer for an organization perspective. Blackstone being the biggest customer offered annual sales of about 2.4 % to CMR‚ but does this relationship offered any value add to the CMR? In the end Sam Marcus must decide whether to continue this relationship without increasing prices or to increase prices thereby threatening a relationship with CMR’s biggest customer. Relationship with Blackstone: Clearly‚ initiating a relationship with the Blackstone was a complete strategic fit for the CMR enterprises
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operates in two segments‚ commercial and residential. Blackstone is a large residential customer who accounted for 2.4%i of CMR’s total revenues and 13.2 %ii of CMR’s total residential revenue. * iii CMR’s CEO wants to grow sales to $70 million‚ ten times current sales‚ within ten years. He needs to decide whether to increase prices threatening the relationship with Blackstone‚ maintain prices as they are‚ or discontinue business with Blackstone. Analysis conducted……. As of December 15‚ 1998 CMR
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