Distressed Assets

Blackstone Group, a New York-based private equity firm and owner of Hilton Worldwide, has raised over $10 billion this year for a new property fund that will invest in distressed property assets.

Given the amount of debt on the books for Hilton ($16 billion+), one has to believe that it too qualifies as a distressed asset.

It is pension funds, endowments, foundations and taxpayers that take the hit, when Blackstone and other private equity firms restructure and default on their debt obligations.
In 2010 Blackstone defaulted on Manhattan’s Stuyvesant Town & Peter Cooper Village (110 buildings and 14,000 apartments) — an asset they acquired largely with pension fund money in 2006. CalPERS (California Public Employee Retirement System) lost at least $500 million. Some have put the figure at $3 billion+.

In 2008 Blackstone CEO, Stephen A. Schwarzman, donated $100 million to the New York Public Library.

In 2010 LE asked Senator Charles Schumer about the Stuyvesant deal, and how it was approved? He disavowed any connection with it, saying it was all Bloomberg’s doing.

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