According to this FT article, Stephen Schwarzman, the head of the buy-out firm Blackstone (a firm that will soon close on a record $13.5 billion buy-out fund), warned that prices being paid in buy-outs are in â€œnose bleed territoryâ€? and that â€œseeds of excessâ€? are being sown.Â As Schwarzman put it:Â â€œ[W]hen it ends, it always ends badly.Â One of those signs is when the dummies can get money and thatâ€™s where we are now.â€?Â This is consistent with the position I took in this post that market forces will prevent buy-out funds from continuing to reap easy profits.
Cite this Article
Bill Sjostrom, Buy-Out Prices in Nose Bleed Territory, Truth on the Market (February 22, 2006), https://truthonthemarket.com/2006/02/22/buy-out-prices-in-nose-bleed-territory/