James on bank merger: ‘No way’

The president of Blackstone has told Private Equity International magazine that his firm has no interest in acquiring one of the faltering Wall Street investment banks, silencing some market speculation.

The Blackstone Group has “no interest” in merging with a Wall Street investment bank, according to Hamilton “Tony” James, the firm’s president and chief operating officer, who is interviewed in the February issue of sister magazine Private Equity International.

Asked whether Blackstone’s expansion plans might include a strategic merger with one of the large, faltering Wall Street investment banks, James responds: “No way. No interest. I’ve been trying to get away from that for years.”

PEI February issue

The statement puts down some market speculation that Blackstone is positioned to merge with a bank, armed now with the currency of publicly traded stock – albeit stock that has fallen dramatically in value since a June IPO on the New York Stock Exchange.

Prior to joining Blackstone in 2002, James led what was once among the largest private equity firms in the world – DLJ Merchant Banking, now a division of Credit Suisse, and formerly the in-house private equity firm of Donaldson Lufkin & Jenrette, which merged with Credit Suisse in 2000. In merchant banking operations, James says it is “tough to balance. . . conflicts” that arise between the advisory and principal investment functions of the business. “I’m very glad to be at Blackstone,” he says.

In the interview, James also says weakness in the US economy would create more investment opportunities in “good companies with bad capital structures” – one of Blackstone’s “power alleys”.

James also predicted that Asia and other emerging markets will constitute larger and larger percentages of Blackstone’s overall deal activity.