Buyout giant The
The day before, rival
Executives of the two New York firms offered these outlooks during their respective earnings calls that showed their funds regaining strength after two years of financial struggle.
Blackstone said its economic net income of $329 million in the fourth quarter reversed a $764 million loss in the same period a year earlier. Its fee-earning assets under management came were valued at $96.1 billion at year-end 2009, up from $91 billion at the close of 2008.
Stephen A. Schwarzman, Blackstone’s chief executive, said his firm will be active in the markets this year.
“We’ll have more realizations in 2010 than we did last year,” Schwarzman said.
But that does not necessarily mean initial public offerings, said Hamilton E. “Tony” James, Blackstone’s president and chief operating officer, noting that sales of portfolio companies to strategic buyers and dividend recapitalizations also represent ways for the company to monetize its investments.
“We could easily see 10 to 12 monetizations this year,” James said.
Laurence Tosi, Blackstone’s chief financial officer, said the buyout shop plans to close its
Schwarzman said Blackstone also is stepping up investments in areas other than buyouts. The firm, for example, has committed $650 million to new opportunistic real estate investments since the beginning of the fourth quarter, after being essentially out of that market for the past two years.
KKR, by contrast, has no plans to raise a new buyout fund because since it already has $14.5 billion in “dry powder” in its existing investment funds, according to Scott Nuttall, a member of the firm, on a conference call.
“The environment has improved substantially over last year,” Nutall said. “Liquidity returning to the market resulted in an upswing in valuations” during the second half of 2009.
In announcing its restated numbers, KKR said it was going to seek a listing on the New York stock exchange and delist from the Euronext exchange in Amsterdam.
“We’re going to be concentrating the liquidity on one exchange,” said Jon Levin, KKR’s treasurer and head of investor relations. The process is expected to take several months, but executives would not discuss details of the plan.