Question:

Is investing in the Blackstone Group(BX) like investing in a mutual fund?

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Hello everyone. I wanted to see if I could get input from anyone that knows anything about the Blackstone Group(BX). I was looking at their stock and it almost seems like a mutual fund but without any expense ratios or management fees. They invest in so many different companies across different sectors. They seem to be a very diverse company. Also their shares are at a great price thanks to the messed up stock market. Is investing in this company like investing in a well diversified mutual fund? I would appreciate info from anyone who has knowledge. Thanks!

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3 ANSWERS


  1. Well, I can certainly see parallels.  But I think you might be mistaken about not having any expense ratios or management fees.  Did you look at their income statement? Or maybe I should say lack of income statement.   Compensation the last qtr was about 15 times their revenue.  That is correct.  Revenue was 68 million and compensation was 977 million.  Darn I wish I had a job like that.


  2. Short term be careful.  This morning the "talking heads on TV" said Merrill Lynch owns 49% of Blackstone Group and that ML is badly in need of cash.  If they sell their shares, BIG supply, same or less demand may equal much lower stock price.

  3. Previous answer was good.  Blackstone made their money during the private equity boom and issued their IPO at the top of the market.  They are flush with cash and are buying up businesses at attractive levels.  On memory (own BX) I think that they pay a 6-7% dividend.

    Their business model has changed with the drying up of easy money in the credit markets.  Most of their money was made in M&A deals that are all but dead now.

    Long term I think it is a winner but you should not think that BX has the diversity and the direction of a well managed mutual fund.

    Good luck!

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