Latest news with #Blackstone
Yahoo
3 hours ago
- Business
- Yahoo
Blackstone Ousts Founder in $60B AI Power Play--Here's What Comes Next for QTS
QTS Realty Trust, once the vision of founder Chad Williams, has entered a new eraone steered directly by Blackstone. Since acquiring the data center operator for $10 billion in 2021, Blackstone has turned QTS into a $60 billion powerhouse and a central player in the AI infrastructure boom. But behind that rise came friction. Williams, known for his methodical, people-first approach, clashed with the private equity giant's push for faster, more aggressive global expansion. That tension came to a head in March when Blackstone bought out his remaining stake in a deal said to be worth $3 billion. The firm moved quickly to install its handpicked co-CEOs, David Robey and Tag Greason, both longtime QTS executives now tasked with executing on a more urgent global playbook. Warning! GuruFocus has detected 7 Warning Sign with MSFT. The numbers tell a compelling story. Under Blackstone, QTS has grown its development pipeline from $1 billion to $25 billion and expanded commissioned capacity from 400 megawatts to 3 gigawattsenough to power over 2 million homes. The company has doubled its headcount and strengthened its standing with hyperscale customers like Microsoft (NASDAQ:MSFT). But challenges are emerging. Microsoft, while still a key partner, has reportedly become more cautious about further commitments in Europe. On top of that, rising tariffs could pressure steel and hardware costs, potentially complicating QTS's expansion strategy. Even so, Blackstone remains bullish. A spokesperson said the firm could not feel more confident in QTS's positioning, describing the data center space as a once-in-a-generation opportunity they intend to fully capitalize on. Greason, a former Army officer and Virginia lawmaker, now shares the CEO seat with Robey, who had previously signaled retirement plans. Together, they're reshaping QTS's next chapterone focused on consolidation, operational speed, and strategic restraint. Internally, the tone has shifted. Williams' eagle-emblazoned red Q branding is being phased out, replaced with a new, sleeker logo. But in its subtle design, the silhouette of an eagle still lingersperhaps a quiet nod to the founder's legacy. As AI demand heats up, insiders are watching closely: can QTS keep scaling without losing the cultural edge that got it here? The answer may shape not just QTS's future, but Blackstone's blueprint for the entire digital infrastructure space. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
9 hours ago
- Business
- Bloomberg
Blackstone's Data Center Darling Confronts a Future Without Its $3 Billion Man
QTS Founder Chad Williams and Blackstone Inc. were on a hot streak. In the four years since the private equity firm's $10 billion takeover, the company had become North America's biggest data center landlord and a force in the artificial intelligence boom. So it was a shock to staff when QTS in March said Williams would be leaving the developer — a $60 billion powerhouse and one of Blackstone's best bets to date. The chief executive officer's two-decade run at QTS would end in less than one month.
Chicago Tribune
13 hours ago
- Business
- Chicago Tribune
Editorial: Managers of exotic investments want more access to your 401(k). Bad idea.
After George W. Bush won reelection in 2004, he famously decided to spend his political capital on an all-out effort to overhaul Social Security and oblige ordinary Americans to make investment decisions on a portion of their federally funded retirement income. The initiative was a high priority for Wall Street, which salivated at the opportunity to manage this massive pool of cash and earn fees on all those assets. Democrats successfully depicted Bush's Social Security reform as a threat to Americans' economic security in their golden years, and Bush's top priority fizzled without even a congressional vote. Arguably, his second term never really recovered from that failure. Two decades later, Social Security remains at risk of insolvency and will require reform of some sort, quite likely by the end of this decade. But right now we wish to address yet another Wall Street gambit to get access to more of ordinary Americans' retirement nest eggs. President Donald Trump is preparing an executive order aimed at clearing the way for employer-sponsored 401(k) plans to offer private-equity and private-credit funds as investment options, The Wall Street Journal reported. Those illiquid asset classes now are available mainly to institutional investors like endowments and pension plans, as well as high-net-worth individuals. We're concerned the net result of this maneuvering is that ordinary investors will be taking considerably more risk in their 401(k)s without even being aware of it. Private-equity firms and non-bank lenders have grown impressively over the last few decades due to substantial demand for their offerings from those sophisticated investors. But these big-time financial players — think Blackstone and Apollo Global Management — have begun to saturate their existing markets. That's where your 401(k) plan comes in. There was $12.4 trillion stashed in U.S. defined-contribution accounts at the end of last year. Managers of more exotic investments than index funds want a bigger piece of that pie. There's good reason these highly illiquid, opaque asset classes have been confined until now to institutional investors. They're riskier than stocks and bonds — the assets that dominate 401(k) plans today — and they're harder to value, providing opportunities for their managers to obscure how well (or poorly) they're doing. Such funds also are difficult to exit for their investors, who typically must remain for the duration of each fund (typically 10 years or longer). Many such funds have performed very well, which is why their participants keep investing in these firms' new offerings. But they're not for everyone, and their investors must carefully weigh the risks before taking the plunge. Making the timing of this move even worse, JPMorgan Chase CEO Jamie Dimon, the nation's most high-profile banker, is warning that private credit funds may be heading for a 2008-style crisis. There seems to be too much money chasing too few deals, and that dynamic usually leads to reckless lending. Direct lending has ballooned in the past two decades, reaching nearly $700 billion last year, according to The Wall Street Journal. Per that model, non-bank lenders strike deals with corporations and buyout firms that rely on debt for their acquisitions. The borrowers that turn to direct lenders in lieu of traditional banks typically do so because the non-bank lenders provide more flexible terms, albeit at higher interest rates. There's a reason banks don't allow for as much flexibility in their loan covenants. When borrowers can't cover their debt payments or show other signs of financial strain, more flexible terms buy them time and often lead to them taking on even more debt to meet their cash needs. That can make the ultimate losses for the original lenders that much deeper at the point of bankruptcy. All that said, it's one thing to make these alternative funds available to those 401(k) participants who prefer to weigh their own risk tolerances and pick and choose among their options in determining their retirement-fund portfolio. It's another to stick these asset classes into so-called target-date funds that are designed to be cookie-cutter investment options for those plan participants who want a ready-made solution. And winning coveted places in those cookie-cutter portfolios increasingly is what these private-equity and private-credit firms are seeking. Some of the nation's largest administrators of 401(k) plans, like Boston-based State Street, have taken initial steps in that direction. Down that path lies many potential unhappy surprises in our opinion. And, with the Trump administration apparently enthusiastically on board, the federal government appears intent on giving the investment industry legal protections from those future aggrieved customers. Who will tap the brakes on this incautious course? With private-sector pensions essentially relegated to history, the 401(k) plan is the primary vehicle financing retirement for most Americans. Unlike pensions, these plans aren't guaranteed to provide retirees an income until the end of their days. Injecting 401(k)s with risks that heretofore were shouldered by our most sophisticated investors doesn't seem aimed mainly at ensuring more Americans have enough socked away to retire with dignity. It looks designed rather to further enrich those who already have reached the mountain top.
Yahoo
a day ago
- Business
- Yahoo
Why Jamie Dimon says we ‘may have seen peak private credit'—and why you should care
On July 15, JPMorgan Chase CEO Jamie Dimon sent ripples through the financial world by declaring, 'You may have seen peak private credit.' The comment, made during the bank's second-quarter earnings call, came with a hedge, as Dimon adding 'a little bit' at the end. Still, Dimon is one of the most successful bankers in generations, someone Fortune referred to nearly 20 years ago as the 'most watched, most discussed, most loved, and most feared banker in the world.' If he's signaling the peak of a $1.6 trillion asset class, it's notable. Private credit refers to loans made by non-bank lenders—such as private-equity firms, asset managers, and hedge funds—directly to companies, and it's exploded in the decade-plus since the financial crisis. Marquee names in the space have grown growing to titanic proportions: Think KKR, Blackstone, and Ares Management. These players often operate outside of traditional regulatory frameworks in transactions that are too risky or unconventional for traditional banks. As banks like Dimon's have been forced by regulations to reduce corporate lending, private credit has become a go-to source for everything from leveraged buyouts to business expansions, offering attractive returns but also carrying higher risks. Dimon's remarks also came in response to an analyst's question about whether JPMorgan itself is looking to deepen its own investments in the private-credit space, as reported by The Wall Street Journal. JPMorgan had a chance to own a private-credit operation but went in another direction in 2008, reportedly to Dimon's chagrin. 'I would say it's not high in my list,' Dimon said about JPMorgan buying a private-credit firm, adding he would have a 'slight reluctance,' depending on the acquisition target. Then he offered a nuanced explanation, reiterating 'credit spreads are very low.' Dimon was suggesting that credit spreads—the extra yield lenders demand for risk—have shrunk to levels that no longer compensate for potential losses. Coupled with looser underwriting and increased leverage, Dimon implicitly suggested we're seeing echoes of risk cycles that preceded past credit busts. In flat terms: Too much capital is chasing too few quality opportunities, driving up risk while driving down returns. Later in the day, as Dimon taped an episode of the 'Acquired' podcast at Radio City Music Hall, he said private credit is 'one place that people worry has unknown leverage.' JPMorgan declined to comment beyond Dimon's comments on the earnings call. Why it matters Dimon's remarks are notable for several reasons, ranging from the impact on corporate borrowing to macroeconomics. A peaking private-credit market suggests 'easy money' is ending—businesses may soon face stricter lending standards and higher costs, which could dampen expansion or M&A activity. Many pension plans, endowments, and affluent investors have loaded up on private credit for yield. If defaults rise or liquidity dries up, retirement plans and wealth portfolios could suffer unexpected losses at inconvenient moment in the economic cycle, or worse. Private credit isn't subject to the same regulations or oversight as banks, raising contagion risk if the market seizes up. Dimon is essentially signaling that what looks like healthy innovation can morph into a vulnerability if risk is mispriced en masse. Dimon's warning also comes in a context of elevated asset prices and policy uncertainty, when monetary policy is in flux and economic growth is cooling—a recipe for for a credit accident cocktail. The impact on your business A peak for private capital would signal tighter lending ahead: Companies—especially mid-sized and riskier firms—may find it harder or more expensive to borrow. This could slow expansion, hiring, and deal-making. As private lenders pull back, traditional banks may regain market share, but with stricter terms and higher scrutiny. Many pension funds, endowments, and even high-net-worth individuals have flocked to private credit for its high yields. If the market cools, future returns may disappoint, affecting retirement savings and investment portfolios. Private-credit investments are less liquid than stocks or bonds. In a downturn, investors may struggle to cash out or face losses if defaults rise. Most ominously, a wave of defaults in private credit could spill over into the broader economy, especially if highly leveraged companies start to fail. Dimon's warning is a reminder that financial innovation can sow the seeds of instability if left unchecked. Dimon's warning is a signal that the era of easy money and rapid growth in the private-credit market may be ending. For executives, business owners, and upper middle class investors, it's a cue to reassess borrowing strategies, investment allocations, and risk management. If Wall Street's hottest trend cools, it could impact everything from business expansion to retirement security. For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. This story was originally featured on
CNET
a day ago
- Business
- CNET
Weber's Premium Outdoor Gas Griddle Is Just $279 Right Now (Normally $449)
Grills don't tend to go on sale during prime outdoor cooking season, but Ace Hardware has a whopper of a grill deal so good that I thought it must be a mistake. Weber's three-burner flat top griddle is down to $279 (normally $449). Even with the extra shipping cost -- or free if you pick it up locally -- this is about as good a grill deal as you're likely to find. Flat-top griddles, popularized by brands like Blackstone and Weber, have made big waves in the outdoor cooking space. They're loved by owners for their versatility and convenience. Griddles may require a smidge of maintenance to avoid rusting, but day-to-day use doesn't require scrubbing grates or picking food out from the grill's basin. Read more: Griddle vs. Grill: Can a Versatile Flat Top Overtake Traditional Grates? Another check in the advantages column for flat top grills is the ability to cook certain foods that you can't on a normal grill. I'm talkin' breakfast fare like scrambled eggs, pancakes and bacon, as well as flaky fish that tends to break apart when sizzled over grates. Yep, now you can even make bacon on the grill like you've always dreamed. Weber Why this deal matters I personally tested Weber's flat-top griddle, and, per the brand's high standards, this unit was well built and outperformed others in its price class. The ignition system worked every time, and the three burners distributed heat evenly across the flat-top griddle. Assembly took about 45 minutes, and the grill sports two handy prep shelves and rolls around on wheels if you need to move it. Ace Hardware is selling Weber's premium griddle for just $279 -- A cool $170 off the normal price. Take a look at other retailers, and you'll see that this is a seriously good bargain on a seriously good griddle. Shipping is not included, but you can pick it up for free if you're near an Ace with this grill in stock.
