• Background: the global value of assets was
soaring in recent years
• PE, more generally, alternative assets, became
the fastest growing segment of the industry.
• the future additional requirements for large scale
• 1) Sustainability of the management team.
• 2) Objectivity of the professional investment
Blackstone’s Model： MLP
• 1) The partners keep effective control of the
firm and the operating partnerships that ran
the funds, so that their fund investment is not
influenced by equity investors
• 2) Earnings were subject to only one level of
• Thus, MLP’s good for future large PEs
• 1) The LPs were not able to be diluted
• 2) The selling of the unit may bring a different
view or treatment to LPs.
Unitholder or LP?
• LP is better
• Second advantage of an MLP is that it enjoys a
• the partnership does not pay taxes from the
• However, when unitholders receive
distributions, they are taxed.