Blackstone's Schwarzman: Opportunities Abound in Private Equity Market

Wednesday, 30 Apr 2014 07:00 AM

By Dan Weil

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The private equity market now provides plenty of investment opportunities, says Steve Schwarzman, CEO of Blackstone Group, the world's largest private equity firm.

It's not that there are a huge amount of bargains out there, he told CNBC. But, "there are important acquisitions you can do if they're strategic," Schwarzman noted. "Strategic means they fit, and they're either significant cost take-outs or significant revenue synergies."

Corporate valuations are somewhat lofty, he explained.

Editor's Note:
New Warning — Stocks on Verge of Major Collapse


"Absolute levels of securities are pretty high. But if you buy a company, you're not always buying public companies. . . . And if you price them in a way that they work for you after you improve them, then there are deals to be had. We're quite active."

Investors have plenty of firepower to deploy, Schwarzman stated. "There's over $2 trillion of cash available. Stocks have moved to a price where you can issue them to repair your balance sheet if you had to. So you'll see more activity."

He declined to offer an opinion as to whether stocks are overvalued.

Meanwhile, Morningstar analyst Stephen Ellis was impressed with Blackstone's earnings report for the first quarter, which included a 58 percent jump in profit.

"Blackstone delivered another strong quarter, as the assets continued to pour in, and its funds performed very well," he wrote on Morningstar.com. "We expect to boost our fair value estimate about 10 percent to reflect the better-than-expected performance."

Ellis currently has a fair value of $33 for the stock, which closed at $29.99 Tuesday

Editor's Note: New Warning — Stocks on Verge of Major Collapse

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