Blackstone refuses to disclose fund performance information

The Blackstone Group refused a request from the US Securities and Exchange Commission for more information on fund performance and bonus compensation, arguing that information about individual IRRs is not 'a meaningful measurement of our results of operations'.

The Blackstone Group has refused to release information about its fund performance or measurements used to determine senior executive bonuses despite a request from the US Securities and Exchange Commission.
In a 31 October 2008 letter, the SEC asked The Blackstone Group to disclose additional information on a number of topics in its annual report, including fund performance and how it determines the size of its bonus pool. Blackstone filled in many of the gaps, but declined to release information on fund performance or bonus compensation.

“In order to help investors better understand how fund performance affects your financial statements, please revise to provide performance information for each of your funds for each period presented. Fund performance information should include the name of the fund, inception date, assets under management as of each period presented, net annualized return since inception and net return for each period presented,” the SEC’s Richard Decker asked in the letter.  

Blackstone responded in a 5 December letter it does not believe “disclosure of detailed performance information…for each of the investment funds that we manage for each period presented is either required by Regulation S-K or, more importantly, a meaningful measurement of our results of operations “, chief operating officer Laurence Tosi wrote.
“The individual rates of return have no direct impact on our financials and therefore we question the relevance to our investors,” Tosi said. “The relevant information for investors is the enhanced disclosure regarding the changes in our assets under management.”  

Blackstone also refused an SEC request to disclose performance measurements used to determine the size of its bonus pool and other targets executive officers must meet to earn bonuses, arguing bonuses are at the discretion of chief executive Stephen Schwarzman and senior chairman Pete Peterson.   

“The performance measurements used to determine the size of the bonus pools are not material to the discussion of the compensation awarded to, earned by or paid to our named executive officers,” Tosi said.