Blackstone CEO Schwarzman: Finance Is a Cyclical Business

The video discusses the challenges and strategies involved in leverage buyouts, particularly those exceeding $5 billion. It highlights the cyclical nature of finance, the complexities of financing large deals, and the importance of equity in maintaining returns. The discussion also covers leverage limits imposed by banks and the potential for alternative debt financing. The focus is on achieving a balance between risk and return, emphasizing the need for a disciplined approach to finance.

What is a key factor that influences the size of leverage buyouts according to the first section?

• The availability of senior debt

• The cyclical nature of finance

• The complexity of capital structures

• The equity market conditions

In the context of financing larger deals, what is often required to make them feasible?

• A simple capital structure

• High interest rates

• Minimal equity contribution

• Significant equity and complex capital structures

How does the junk bond rally affect financing according to the second section?

• It simplifies the financing process

• It increases the difficulty of financing

• It reduces the need for equity

• It has no impact on financing

What is the leverage limit mentioned in the third section?

• 4 to 5 times leverage

• 7.5 to 8 times leverage

• 5 to 6 times leverage

• 6.5 to 7 times leverage

What is the target unlevered yield that the firm aims for to ensure good returns?

• 20% unlevered yield

• 5% unlevered yield

• 8 to 10% unlevered yield

• 12 to 15% unlevered yield