• 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 PEs are:

• 1) Sustainability of the management team.• 2) Objectivity of the professional investment

decision.

Blackstone’s Model ： MLP

• Advantages: • 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 income tax

• Thus, MLP’s good for future large PEs

LP’s Concerns

• 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

tax benefit• the partnership does not pay taxes from the

profit • However, when unitholders receive

distributions, they are taxed.