Blackstone refunds real estate fees earned during boom

New York /
Aug.August 27, 2010 10:00 AM

Blackstone Group and some of its managers have returned $3 million worth of performance fees earned during the commercial real estate boom to investors in one of its real estate funds, and another $15.7 million in refunds may soon be on the way, Bloomberg news reported. Blackstone took in a total of $1.74 billion in performance fees through its property buyout funds between 2004 and 2007, allocating some of those profits to more than 100 individuals. But in the years since, prices for the office towers, hotels and apartments it acquired have dropped by around 39 percent. Clawback provisions for private-equity funds typically stipulate that if its holdings permanently decline in value, the firm and its executives return a portion of their profits to investors. Blackstone isn’t the only private equity fund forced to make refunds in the wake of the real estate crash, nor is it the first: “that is what happened when the Internet bubble burst and there is certainly the potential for that with the sharp downturn in the real estate market,” said Michael Harrell, of law firm Debevoise & Plimpton. Blackstone said in a statement that it expects its funds to be profitable going forward and that “any final clawbacks will be insignificant.” [Bloomberg]

 

Related Articles

arrow_forward_ios
Clockwise from left: 2250 59th Street in Brooklyn, 249-26 Northern Boulevard in Douglaston, Queens and 906 Wortman Avenue in Brooklyn (Google Maps)
Industrial buyers can’t stop, won’t stop
Industrial buyers can’t stop, won’t stop
Blackstone's Stephen Schwarzman and 8 Spruce Street (Getty, Wikimedia)
Blackstone close to $930M purchase of Lower Manhattan apartment building
Blackstone close to $930M purchase of Lower Manhattan apartment building
Brookfield Asset Management CEO Bruce Flatt and Blackstone CEO Stephen Schwarzman with One Manhattan West (Getty, Brookfield)
Blackstone closing in on One Manhattan West stake
Blackstone closing in on One Manhattan West stake
Blackstone’s Stephen A. Schwarzman and Jonathan Gray (Getty)
These are the 10 largest real estate fundraisers of the last 5 years
These are the 10 largest real estate fundraisers of the last 5 years
Levered and loaded: KKR looks to flex its real estate muscle
Levered and loaded: KKR looks to flex its real estate muscle
Levered and loaded: KKR looks to flex its real estate muscle
Blackstone secures $1.1B refi on Sun Belt multifamily portfolio
Blackstone secures $1.1B refi on Sun Belt multifamily portfolio
Blackstone secures $1.1B refi on Sun Belt multifamily portfolio
RealSure CEO Katie Finnegan (LinkedIn)
Realogy, Home Partners of America iBuying venture hires first CEO
Realogy, Home Partners of America iBuying venture hires first CEO
Real estate powers Blackstone’s best quarter ever
Real estate powers Blackstone’s best quarter ever
Real estate powers Blackstone’s best quarter ever
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...