Blackstone Buys Stake in BC Partners

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Raymond Svider’s shop gets a boost of confidence.

The Blackstone – BC Partners deal is official.

Following a big run up, the U.S. private equity giant plans to invest $560 million into its European rival.

Blackstone’s Alternative Asset Management (BAAM)’s Strategic Capital Group will own up to a 15% stake in BC Partners. BC Partners spun out of Barings Bank in 1995 and has $27 billion under management.

Familiar Territory for Blackstone

The European PE shop focuses on buyouts and M&A financing in the U.S. and Europe. In a press release, BC Partners said the deal will bolster its balance sheet and finance plans.

“This investment is a testament to the growth and institutionalization of our business and will enable us to take the firm to the next level for the benefit of our investors,” said Raymond Svider, Partner and Chairman of BC Partners. “We look forward to leveraging Blackstone’s best-in-class resources and exceptional talent as we look to expand and strengthen our platform across our three key verticals.”

“BC Partners has a three-decade track record investing across sectors and geographies,” said Scott Soussa, Head of BAAM’s Strategic Capital Group. “This, combined with the strength of their people and processes, has allowed the firm to earn the trust of a diverse set of LPs around the world. We look forward to helping enable their continued growth in private equity, as well as their further expansion into newer areas like real estate and private credit.”

Criticism for the Blackstone BC Partners Deal

Despite the positive press release, Bloomberg didn’t offer any praise for the deal. Under the headline, “The Leveraged Buyout Industry Is Starting to Eat Itself,” Chris Hughes questioned the logic of the deal.

Hughes notes that BP Partners’ performance has slipped since 2011.

Furthermore, its current fund is off 11% so far. BC Parntershas struggled due to a variety of bad investments in firms like PetSmart and retailer Phones4U.

Since inception, BC Partners Private Equity has completed 112 private equity investments. In addition, companies it invested in have a total enterprise value of €135 billion. It is currently investing its tenth private equity fund.

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