Blackstone to spin off advisory businesses
American private equity giant Blackstone is planning to spin off its advisory businesses and merge them with Paul J. Taubman’s financial advisory firm PJT Partners to form a new independent publicly traded entity.
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The spinoff of the business, which includes financial and strategic advisory services, restructuring and reorganization advisory services, and its Park Hill fund placement businesses, is being done to avoid potential conflicts of interest.
Subject to regulatory approvals, the transaction is expected to complete in 2015.
The new entity will be headed by Taubman, who will serve as chairman and chief executive officer. Taubman will also serve as chairman of the board of directors of the new entity, which will also include four independent directors.
Following the spin-off, Blackstone’s existing unit holders will own approximately 65% of the new entity, while the employees of the new company will own remaining 35% of the company.
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By GlobalDataThe new company will capitalize on favorable industry trends, serve its clients and enhance its growth prospects by operating independently. The deal is intended to be tax free to Blackstone shareholders.
Stephen Schwarzman, chairman, CEO and co-founder of Blackstone, said: "The separation of our investing and advisory areas will create new growth opportunities for both businesses."
Taubman said: "Further, by eliminating the potential conflicts that existed as part of the world’s largest alternative asset manager, these three businesses will now be positioned for significant growth. The new enterprise will include the leading restructuring franchise on the Street, a market-leading fund placement business and a strategically important advisory practice."
As of 30 June 2014, Blackstone’s advisory businesses have generated approximately $380m of revenue.
