The Blackstone Group L.P.BX

Blackstone is the premier private-equity firm in the world. This affords the firm a first look at all of the best deals as well as the ability to tap capital markets to competitively bid for them.

Blackstone's investment funds have delivered phenomenal returns over much of the past 20 years, as the firm's investment approach has allowed it to succeed in a wide array of operating environments.

The company's expertise running corporate private-equity and real estate investments has allowed it to develop financial advisory services for mergers and acquisitions and corporate restructurings and reorganizations, establishing another source of revenue for the firm. Read more 

Blackstone would be hard-pressed to repeat its past performance, given the malaise that has overtaken the credit and equity markets. Tight lending conditions will probably cut into the firm's ability to move into new investments and leverage buyouts to the level it had in recent years.

Despite having $29 billion in capital that can be employed in new opportunities, Blackstone remains cautious (having just written down more of its real estate assets) and does not expect much in the way of new investments in the near term.

Given the rich premium that was paid for private-equity and real estate assets when credit was relatively easy, not to mention the amount of leverage applied to many of these deals, there has been an increase in credit-related problems for many of these investments. Read more