Blackstone Group LP is finding it more difficult to find new deals as credit markets tighten, which will affect near-term results, President Hamilton James said on Monday.
He also said the private equity firm, which reported its maiden quarterly results as a publicly listed company, is prowling credit markets for opportunities because it may be able to find better returns buying discounted debt on leveraged buyouts than it could have achieved acquiring the equity.
James said despite the credit market volatility that is forcing rival deals to be pulled or renegotiated, Blackstone itself is not feeling the pinch too badly.
We have very few hung deals, he said during a conference call with analysts.
He added that Blackstone sees no signs of a general slowdown in the U.S. economy.
Blackstone plans to look for smaller buyout deals and ones abroad rather than the mega-deals that have become popular over the last year because the financing needed for them is now too hard to obtain.
He also said the firm had a robust pipeline in Asia.
James said Blackstone probably would not have made some of the acquisitions at the prices it did earlier this year had it not been for the covenant-light financing that was available. He did not specify which ones.
The firm reported a tripling of net income earlier in the day and recently closed the largest buyout fund in history.
James declined to say if Blackstone would change its dividend policy even though it achieved in the first half about three-quarters of what it had set out as an annual minimum.