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Blackstone invests in troubled mortgage insurer PMI

Private equity giant lends working capital in return for stake, board seat

September 03, 2015 11:07AM

From left: Blackstone's head of real estate Jon Gray and Blackstone CEO Steve Schwarzman

From left: Blackstone’s head of real estate Jon Gray and Blackstone CEO Steve Schwarzman

The Blackstone Group bought a stake in troubled mortgage insurer PMI, apparently continuing its strategy to bet on companies for which prices plunged following the financial crisis.

California-based PMI was hit hard by the wave of foreclosures in 2008 and 2009 and went bankrupt, ceasing to insure new loans in August 2011. The company left bankruptcy protection in 2013 and has recently seen its fortunes rise, according to Bloomberg.

Blackstone is lending PMI money to pay its bills, in return for the right to participate in future equity offerings and the right to nominate a member of PMI’s board of directors.

“Blackstone is well positioned to help the company achieve its strategic objectives and maximize value for all shareholders,” Blackstone Tactical Opportunities’ Naveen Bhatia said in a statement quoted by Bloomberg.

Blackstone has been the most active investor in U.S. real estate over the past decade, scooping up undervalued properties following the financial crisis and racking up double-digit returns. [Bloomberg]Konrad Putzier