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Thursday, January 30, 2014

Physical commodity assets 'inconsistent' with Blackstone model -exec, (NYSE: BX)

Blackstone Group's asset-light model may not fit with the potentially risky, capital-intensive business of trading physical commodities, a top executive said on Thursday, in comments that seemed to jar with its interest in the industry. Blackstone is one of three finalists in the running to purchase JPMorgan Chase & Co's physical commodity division, which includes metals warehouses, a large global oil trading group and gas and power deals. A final decision is expected within days, industry sources have said.Blackstone President Tony James did not directly discuss the JPMorgan business, one of the biggest raw material operations on Wall Street, but in a call with analysts offered rare insight into the world's largest alternative asset manager's thinking three years after it first started looking at diversifying its revenue by getting into commodities."Our business is to manage other people's capital and most of the successful commodities businesses are firms that are based around having a strong presence in physical assets and a lot of infrastructure. That provides some other asset management or trading opportunities but you've got to be able to build the business up," he said."That is inconsistent with the asset-light asset manager model that we have."

The Blackstone Group L.P. (Blackstone) is a manager of private capital and provider of financial advisory services. Shares of BX traded higher by 4.2% or $1.3/share to $32.23. In the past year, the shares have traded as low as $17.63 and as high as $33.41. On average, 4237370 shares of BX exchange hands on a given day and today's volume is recorded at 14547950.