Blackstone Group LP, the world's biggest private-equity firm, said that a $10 billion leveraged-buyout deal is possible with banks' growing willingness to lend, and that the real estate market is stabilizing.
Garrett Moran, a senior managing director at the firm, said lenders can provide $5 billion in financing, making such a deal possible.
"We have a very workable market," Moran said Thursday at a company investor conference in New York.
Buyout firms have struggled to jump-start dealmaking after the global financial crisis froze credit markets in mid-2007, ending the biggest leveraged-buyout boom in history. Managers have announced $68.1 billion in deals this year through Wednesday, compared with $443.6 billion for the same period in 2007, according to data compiled by Bloomberg News.
Blackstone was among the private-equity firms that in May dropped a plan to bid more than $15 billion for Fidelity National Information Services Inc., a Jacksonville, Fla., payment services provider that sought a higher price, said people briefed on the talks. The transaction would have been the biggest LBO since Blackstone's $20 billion takeover of what's now Hilton Worldwide in July 2007.
Blackstone said property deals are also becoming more likely with the thawing in bank credit.
"We face a very favorable investing environment for commercial real estate," Jonathan Gray, a co-head of the firm's real estate business, said at the conference. "Fundamentals have begun to stabilize."
Blackstone agreed last month to invest $500 million in General Growth Properties Inc. as part of the Chicago mall owner's plan to reorganize in bankruptcy. The company is scheduled to seek court approval next month for its plan to exit bankruptcy.
Stephen Schwarzman, Blackstone's chairman and co-founder, has expanded its nonbuyout business such as fund of hedge funds, merger and restructuring advice and credit funds. The latter stands to benefit from the Volcker Rule, which limits banks from engaging in proprietary trading, said Bennett Goodman, a Blackstone senior managing director and co-founder of its GSO Capital Partners business.
"Historically one of our biggest competitors was Wall Street prop desks," Goodman said at the conference.
J. Tomilson Hill, who heads Blackstone's fund of hedge funds business, said his company estimates the capital managed by Wall Street banks' proprietary trading desks has fallen this year to $250 billion from $800 billion, and will drop more.
"Not only is talent leaving the banks, but there will also be an absence of proprietary capital," Hill said.
Schwarzman and Peter G. Peterson formed Blackstone in 1985.