Blackstone (BX)

Some of the best investments are stocks that act like funds in that they have the freedom to invest assets how every they seem profitable. The finest example of this is Berkshire Hathaway (BRK-B) and Warren Buffett’s amazing capitol allocation. With a salary of just $100,000 dollars, this is one hell of a deal compared to the 1.25% management fees of some one like Bill Miller with Legg Mason funds. This theory is one of the reasons TLTI is so fond of Sears Holding (SHLD). Another way to find stocks of this ilk is to examine the world of public ‘private’ equity groups, business development groups, and conglomerates similar to BRK-B.

Although we make no recommendations on the following stock, The Blackstone Group (BX) is an interesting institution worth following. This private equity group came public this year and has done nothing but drop 16%. A problem with investing in this company is that most individuals don’t understand what it does or its structure. BX has grown from a $400,000 investment group in 1985 to a massive, multinational, financial leviathan.

Structure/Divisions

Private Equity Division
As of June 30, BX had stakes in 44 companies ($31.8 billion assets). Early in BX’s life, they invested in US based companies. In recent years they have expanded globally. Sector exposure includes: Packaging, retail, food & beverage, pharma, telecom, healthcare, clothing, transportation, shipping, media & publishing, theme parks, financial services, soft drinks, reinsurance, energy software, lodging, chemicals, waste management, auto parts, and much more.

Real Estate Division
As of June 30, BX controlled real estate valued at $23.1 billion dollars mostly in US but growing in Europe. This includes real estate great Sam Zell’s former REIT Equity Office Property Trust. The real estate portfolio includes offices, theme parks, lodging, realty, hospitals, resorts, etc.

Marketable Alternative Derivatives Division
May 1, BX managed $35.5 billion in assets. These include hedge funds ($24.4 billion) focused on institutional customers, hedge fund advisors, mezzanine funds ($1.5billion), close-ended mutual funds including The India Fund (IFN) & The Asian Tiger Fund (GRR), and senior debt vehicles ($8.4 billion).

Financial Advisory Division
Division includes Corporate & Mergers & Acquisitions, Restructuring & Reorganization, and Private Placement Advisory.


Further research is underway to determine appropriate buy prices. This stocks provides strong diversification because of its many unique investments. One thing we fear is that this company may be too large for its own good. Keep an eye on BX.