Question

Discuss how the financial intermediary role of Blackstone Corporation has changed since it converted from a publicly traded partnership to a corporation. Note: please stick to the question asked by specifically discussing Blackstone's role as an intermediary and how it changed following its conversion.

Answer 1

Blackstone conversion from publicly traded partnership to corporation has the following change in its new role :

1. Exposure to potential buyers : Blackstone being a publicly traded partnership , disqualified from being able to bought by huge number of buyers. As a corporation , this will allow Blackstone to increase the size of buyers and allow more investor to its stock.
2. Trade across boundaries : As a publicly traded partnership , Blackstone was limited to national boundaries , while as a corporation it can trade across boundaries outside U.S
3. Diversity in Business : Being Corporation, Blackstone is now better placed to diversify business on a global basis
4. Increased Share Price : The movement from Partnership to Corporation would boost its share price , which in earlier was traded at discount to traditional asset managers.
5. Overall impact on profitability : Blackstone as a corporation has now increased earnings from fees boosting the profitability of the company.