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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (48642)

7/10/2012 7:07:20 PM

From: Sergio H

Read Replies (1) | Respond to of 78710

BX- looks like you have to deal with a K-1 tax form if you buy BX units? One thing thatirks me about these asset managers is the dilution (unit count increased mor than 10% YOY) that seems to be inherent with these private equity asset managers. The unit issue seems to be nothing than disguised compensation to me, and I noted that in some cases, the unit count increases faster than assets under management.

Yes, you have to deal with a k-1 for BX units.

They do have a handsome equity reward for their managers. From the last 10k:

<For the three months ended March 31, 2012 and March 31, 2011, the Partnership recorded compensation expense of $222.4 million and $426.3 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $5.5 million and $4.2 million, respectively.>

Please correct me if I am wrong but the compensation seems to be ok as the shareholders have not been cheated. I just looked at the last two years.

The increase in shares is lower than the increase in income comparing 2011 to 2012.
Around 12% increase in shares but 18% increase in net income.

Weighted-Average Diluted Common Units Outstanding		517,389,558		457,652,916

Diluted Net Income Per Common Unit	$	0.11	$	0.09

Assets under management seems to have increased by a higher percentage. Around 21%

190,074,167

149,963,465