Did you get an invite to the biggest party of the summer? No, not the London riots that became a street party for more than one thousand looters, rather the one to Leon Black’s 60th birthday party in New York’s Hamptons.
Black’s bash generated a lot of exposure in the New York Times, as we report on page 4. Apart from big revelations like Elton John’s song list, the newspaper blew the lid on this little exchange between Goldman Sachs chief Lloyd Blankfein and Blackstone’s Steve Schwarzman: “Your 60th got us into the financial crisis. Let’s hope this party gets us out of it.”
Not to be outdone by the Times, PERE also has thrown a bit of a spotlight on those operating in the public arena for this issue. Coincidentally, the firms of both Blankfein and Schwarzman figure to some extent.
On page 15, James Comtois explores the quick tempo of Blackstone’s latest fundraise and the wave of LP commitments that have been made to that fund and other big fundraises this summer. As an aside, one competitor to Blackstone wondered out loud recently whether being public gave the firm an advantage and might even help explain why it is outbidding rivals in auctions.
Mind you, being public hasn’t necessarily helped Goldman Sachs and its Real Estate Principal Investment Area. One of its funds had lost so much value that staff actually assumed it was all over two years ago. However, the longer term prognosis, as Jonathan Brasse reports on page 8, suggests things are less clear cut that they might first appear. Indeed, the firm’s future might hinge more on Volcker than performance.
Fortress, on the other hand, sees a more certain future for its real estate credit team led by Peter Briger. Starting on page 28, Jonathan Brasse takes you behind the scenes with this crew that likes to get down ‘n dirty with real estate to find value where others only see risk.
But for a big spotlight on public firms, read Evelyn Lee’s report on REITs, beginning on page 36. There is a blurring of the lines at present as REITs ramp up private fund operations and private investment firms consider non-listed REIT structures.
Our other focus is on the emerging markets of Europe, where attention seems to be returning. On page 40, yours truly looks at the private firms and REITs buying in Russia, as well as signs of increased activity in Turkey and the Baltics. So, see you on the next flight to Moscow.
In the meantime, let’s get this (public) party started.