The Alternative Investment Giant Boosts Stakes in GTES and FG

The Blackstone Group 13-F for the third quarter emerged this week

While we cannot see the private company holding of Blackstone in these filings, we can see what publicly traded securities they own. Many of these will be former LBOs by the Blackstone Private Equity group, where the firm is looking or higher prices to exit the stake at larger gains. Others are simply public companies Blackstone thought merited purchase of its investors and itself.

Top Holdings in the Blackstone Group 13-F

Among its top holdings, Blackstone made a significant increase in the holding of Gates Industrial (GTES).

Blackstone purchased Gates back in 2014 for $5.4 billion. The stock has fallen almost in half since the IPO, and Blackstone has been increasing its stake. Blackstone owns 86% of the company and has been adding to its stake for several quarters in a row. Gates sells engineered power transmission and fluid power solutions to a wide range of industries and is considered to be highly cyclical. They have taken aggressive steps this year to convert a higher percentage of operating income into free cash flow with a great deal of success. At the end of the third quarter, free cash flow for the trailing 12 months was double the level a year ago.

Blackstone also increased its holdings in FGL Holdings (FG), the insurance company for which Blackstone manages money in their fixed annuity portfolio. The asset giant already manages about $50 billion of fixed annuity portfolios and is looking to grow that business aggressively. Blackstone currently owns 19% of the company and has been adding to its holdings in recent quarters.

At the end of the third quarter Blackstone’s ten largest holdings were:

• Chenier Energy Holdings (CQP)
• Gates Industrial (GTES)
• Invitation Homes (INVH)
• Change Healthcare (GHNG)
• Vivant Solar (VSLR)
• Tallgrass Energy (TGE)
• FGL Holdings (FG)
• The Stars Group (TSG)
• Michaels Companies (MIKL)
• Blackstone Mortgage Trust (BXMT)

Related: Here’s What’s in the Apollo Management 13-F