GIANT Private Equity Firm Suspected Of Defrauding Investors
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- Опубликовано: 10 май 2024
- Private equity giant Blackstone created BREIT, a private fund for individual investors, but it may end up being a devastatingly terrible investment. Ana Kasparian and John Iadarola discuss on The Young Turks. Your Support is Crucial to the Show: tyt.com/team
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"In 2017, Blackstone - the world's largest private-equity firm, which usually caters to big institutions and the very wealthy - decided to give ordinary investors an opportunity to get in on the firm's magic. It created BREIT, a private fund that buys commercial real estate like warehouses and apartment buildings, and marketed it to everyday investors as an "all-weather strategy to build long-term wealth across market cycles."
And it was magic: By offering an annual dividend of about 4% in a world where interest rates were close to zero, BREIT quickly became a giant. At its peak in 2021, the fund was attracting as much as $3 billion a month in new investments. Today, BREIT boasts assets of $114 billion - about 8% of Blackstone's entire fee-earning assets - and has generated over $5 billion in management and performance fees."
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240508__TA03_Is_Private_Equity
Blackstone is doing a LOT of stuff that's not good for anyone but Blackstone.
Question is why is a public university system acting more like a hedge fund than an actual university?
Everbody is greedy when it's their money. Woke people tend to be extra greedy when it's there money, they only froth over other people having more then them. Did you know that the Church of England is investing in hedge funds too?
@@YEC999 well the Church of England isn't in the US. But you shouldn't be getting tax dollars or tax exceptions if youre gambling on stocks.
Didn't Sam Bankman-Fried go to jail for defrauding investors?
The Business Insider article was written by Bethany McLean, who I presume is the same person who wrote the Fortune article in 2001 asking, "How exactly does Enron make its money?" She did a good job sniffing out BS then - Enron went down the tubes when the truth came out.
I believe investors should focus on under-the-radar stocks, especially given the present rollercoaster nature of the stock market. 35% of my $270,000 portfolio consists of collapsing stocks that were previously respected, and I don't know where to go from here.
@RobertDennison411
How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?
Multi and single family housing representing a large % of their fund. The % increase in rent in the past two years has been far beyond market rates. This is clearly them attempting to stay solvent.
Another crooked hedge fund imagine thst
STOP CORPORATE WELFARE
learn the difference between keeping your own money and demanding someone elses.
DooDoo Donnie handed out 8 trillion in one term so the ultra wealthy could have more money … but gas waaaaaaaa😫😫😫😫food waaaaaaaaa 😆😆😆😆
Great Job Ana!! You should do more stories like this.
Blackstone should have been broken apart YEARS ago.
The University Of California system has to divest from private equity that is buying all the homes. This would be like finding out that they are investing on private prisons and the military industrial complex. It is just for private equity to purchase all the homes in the market. What we need are more homes, and subsidies for first time home buyers. Let’s go Brandon! Ban private equity from buying homes. The UC system should be ashamed of themselves.
Nobody says let's go Brandon anymore
"Pirate equity" not trustworthy...?
Nooooooooooooo!
Madoff was offering 10% until he couldn't anymore. Keep chatting the stock up.
I checked the pharmacy chain i work for...corporate side not in store...and blackrock owns between 3 and 5 of the shares ....they have their greedy hands in everything. Greed has become a mental illness....its disgusting ...money makes money....i could live off the interest of 3 million dollars without ever touching thr money...thats how easy to make money it is when you have money...i hate this place so bad.
Blackrock and Blackstone are not related. Easy mistake to make.
@@user-tm1xf8zj2s They once where. And BlackRock was the small stone that was spun off and as the story goes when the faather is a stone the son needs to become a rock...
I like Ana's financial reporting. Much better than CNBC
Wait until nobody can pay the rent of their rental housing. Then watch the the plunge into the abyss.
This is why a government organization should be forbidden from behaving like a private entity, like making private investments. Shame on the education department.
What a surprise. When there are no consequences, why wouldn't they defraud their investors?
When you invest your money, words like private and hidden should immediately raise a red flag. Private equity firms are not required to disclose their finances like a typically publicly traded companies. Therefore, they can hide questionable and unfavorable finances such as loses.
The problem with the stock market is that, it is controlled by the majorities that hold it
thats also the problem with democracy as well.
Here we go again . Get rid of all your risky loans by selling them to pensioners. Hello 2008.
Yup!
I'll never understand why we let Wall Street own thousands of homes. They compete with young people trying to buy their first homes. How do these people compete with permanent capital? They make it harder for people to achieve the dream of home ownership.
why blame wall street, should blame all teh greedy home seller who sell to hihgest buyer instead of taken a paycut and sell to younger 1st time buyer
@@yia01 Horsesh1t. A home owner sells high so they can afford to buy their next home, whose prices have been pushed up by those like Wall Street owning all the property. :\
@@yia01 I blame Wall Street because they received$16 trillion dollars from the federal reserve after they destroyed the economy and decided to use some of that free money to buy out entire neighborhoods around the US and make us a permanent class of renters.
Send them all to prison no trial needed!!!!
I dont have a ton of sympathy for people who choose to invest in private equity, if you choose to jump in you take that risk.
The government shouldn't allow it
Private equity acts with great impunity on many, many fronts.
Thanks for the info!
Does anyone find it ironic that our real estate market is in jeopardy?When we've had a real estate tycoon in office. Pretty weird shit going on.
The real estate tycoon isn’t in office anymore. That’s why it’s in jeopardy.
Its been defrauding from the beginning
Waiting for Biden to raise hedge fund managers taxes
He needs congress to get that done.
Won't happen.
How many state retirement systems are in this fund?
Defrauding their own investors. What are the odds.....I wonder
Shades of Goldman in mid-two-thousands?
Simple rule - if it sounds too good to be true, run.
If it is such a good investment, ask yourself why they are not offering the investment to their normal billionaire sophisticated clients.
Billionaies don't get to be Billionaires by falling for a bogus pitch.
They get there by giving the pitch….
@@user-zc2hk3cs6v
LOL, that my explain their reluctance to buy-in.
Man, this lady is put together all the way around. Impressive!
Commercial real-estate in general is sketchy, They would rather keep a place empty for a decade then take a lesser rate to keep the paper value up.
This deceit is what happened 100 yrs ago, destroyed so many! Is why these days finance types HAVE to be sociopathic in order to profit at many others’ expense- it takes a sick soul.
It looks like Blackstone are in the lying & stealing stage of their gambling addiction.
😂🤣😂🤣 I was thinking the same thing
All commercial real estate isn't doing bad. Office and Retail may be hurting but self-storage, industrial, and multifamily are doing pretty good.
@@Alogicchannel you should take your own advice buddy on seeing the whole picture! If Blackstone isn't heavily invested in the commercial classes I mentioned that are doing well, then of course the price should be going down Einstein.
A Reit should not be compared to investing in common stock. They are two very different things.
Good reporting.
If it looks too good to be true, it's not.
This is excellent information that helps average investors be wary of these investments.
When I heard Larry Fink talk about an agenda outside of something involving assets, figured something was awry.
BlackRock (Larry Fink) is not Blackstone (Steve Schwartzman)
Keep voting against your best interest. Keep listening to the culture wars, listen to The Talking Heads tell you that you're wrong for demanding your fair share for your taxes. I mean, voting for the same people over the last 400 years is really improved this nation so much. Maybe it's time we give socialism a try
My senators top donor being a bad boy??
Companies can kill people through negligence… but lying to the investor class is a step too far.
Sounds like they have the same special accountants as Bernie Maddoff …
They own the resort I work at....joy!
Ana, this was a great presentation about the opacity of the BREIT product.
Opacity in how underlying assets are constructed and value in advertised promotions / solicitations for investment.
As one who spent the last 35 years dealing with private equity and such investment funds on the asset aggregation side, the one takeaway I can tell you is this. Private equity managers do not care what you or anyone else thinks. They only care about attracting your pension funds flow, your personal investment capital, or any other money they can extract from you and the vig they take from you.
Love your perfect makeup ❤ Thank you for all of the research shared. Great job 🎉!
He literally said the UC system came in AT A CERTAIN LEVEL😂😂
That’s a pyramid MLM all day
Schwarrzman and Gray appear to be offering another Madoff deal. Surprise, surprise.
Sometimes anti trust activity needs a second look at it.
Let's be on it due to the deregulation private equity firms have pretty much devastated our economy and increased to have and have nots and we're probably going to be in a housing bubble because of the private equity firms and their horrible greed
Private Equity is a bad actor in *so many* sectors and overall their contribution to society is to make everyones life a little crappier and more expensive.
The banks take the loss, then the banks will get bailed out sending the ultimate loss to taxpayers.
Corporations can't get sued for defaulting so they can use that protected money to buy the same property back from the bank when they sell it for a hefty loss.
TYT needs to pin this comment. That’s probably exactly what they’ll do.
Hell of a way to run the system against the American people.
they bought the Alphabet apartment complex in NYC, making housing unaffordable, I had friends, struggling musicians etc, lived there in a very bad neighbourhood. They cannot live there now. increasing homelesnes...
They are using what is called the Madoff recovery system.
I wonder if their bigger investors get out first leaving the small investors holding the bag.
The reality, as shown here, is retirement/pension funds run the market. Its why you have CEO's held to Quarter to Quarter results and shortsightedness that prevent companies from long term planning. What's the result? Companies that cannot make their analyst driven quarter numbers use layoffs to chop the expense line resulting in a more favorable bottom line. And that hurts their long term intentions as they reorganize and re-balance planning losing precious true execution opportunity.
I want to short it
I knew somewhere the tears of the working man would be discovered
Low risk investment is a sign of capitalism gone wrong. Fiduciary responsibility shouldn't exist. Investment is meant to be a gamble. What these private equity firms are doing is making high risk investments with other peoples money which makes it low risk for them. Lack of regulation has let them offset their own risk at the expense of investors. The fact that they also are doing this with housing investments let's them take advantage of people twice, once with investors and again with potential buyers/renters. It's a double dip on greed with almost no risk to themselves.
Blackstone's size is attributed to soaring rent prices in trading circles, too few companies own too much real estate & it allows them oversized control over the entire market.
In the early '70s, my neighbors and I restored our apartments in an old luxury apartment building from the turn of the 20th century, before Hollywood became the film capital. I used a stripping tool from Sears that was essentially an electric-stove coil in a 4" x 8" casing with a handle and a solid scraper. As long as the painted surface starts with varnish, 5 to 10 seconds of the heat bubbles off in a ruffly-clump. Gallon tins of Strip-Eze (Strypeez maybe now, but maybe not) was then used only to clean up the surface. The apartments had walnut bookcases, buffet, picture moldings, and butler's pantry; the fireplace was ornate, poured-composite and the French doors to the sunporch were oak and glass. I'm told, it took more than two weeks to tear it down, so I've never gone back.
Why did you have it torn down?
@@michaelswagson4457 I am thinking they were renters.
BREIT also has high sales fees (upto 3.5%) compared to other publicly traded ETF REITs. Learned along time ago that funds with high sales fees should be ignored. Both Vanguard and Fidelity offer mutual funds and ETFs with zero sales fees and some of the lowest annual servicing fees in the industry.
Good point.
Why isnt the UC system _investing_ their funds on their students? The UC system isnt a for profit org
"Mark to Magic" sounds like similar terminology Anderson and Enron were using. Believe they would say, "Mark to Market", and state their profits based on that methodology.
Wilmington, Delaware
When it all crashes and everyone loses their money, an adjacent fund will come in and hoover up all the properties for pennies on the dollar.
This is just the initial part of the plan nearing it's endgame.
If you are making 1% of AUM (assets under management) and YOU get to decide the value of those assets? Of course the value is going to be overstated - they have no reason not to lie and there is no way to prove they are. They will take their fees everyday till the wheels fall off and stick retail with the bag.
Hey, TYT, Thank you for having ZIPPER HOODIES in your merch store! I am sick of pullover hoodies, plus now I have a bum shoulder. Much appreciated.
Dividend Aristocrat and Kings y'all...
The safety, the yields, the long term yearly increases.
Keyword in the commercial real estate is 'datacenters'
i did some work at the CEO's house. In that house is the 120 million $$$ Edvard Munch's "The scream"
5:55 I don't think data centers will be considered a risky investment at least for the foreseeable future with the advent of AI. If the trend continues to boom you will most likely see companies spend more on data centers.
11:30 - translation: "We made this $hit up, no you _can't_ check our math. Get bent."
Herbie Maddoff, Hello! Hello! Bernie f#cking Maddoff, Hello!
Data centers are KILLIN IT !!!!!!! GO BX , keep making me $$$$$$$$$
This is just 2008 all over again. Smh.
It will be worse than 2008 because now it involves so much more than over-inflated home values. It's large debt.
@@Here4TheHeckOfIt All I know is..I'm going to make sure I have no debt when this all hits the fan.
It didn’t end too well for the party that controlled the White House in the election that year. Having said that, 2008 was blown out of proportion. Property values tanked about 30% if I remember correctly and the stock market tanked about 50%. No one “lost everything” like they claimed unless they put every penny they had into something like Bear Sterns like Inverse Cramer suggested, which is why diversifying your portfolio is one of the top rules of investing. Even if you sold your real estate or stocks at the lowest point, you only lost 30% and 50% respectively, not everything. But the number 1 rule of investing is buy low, sell high. When it crashes, you don’t sell like the chicken littles on the fake news that are trying to scare you for ratings tell you. You buy buy buy. My whole group of friends did and the stock market has increased about 6 fold since then and real estate is through the roof. One friend said his only regret was he didn’t buy more real estate.
University of California, get your lawyers ready! A huge lawsuit is looming down the pike!
Student tuition rates in the UC schools just went up in the fall!
That would be a yes
I mean commercial real estate might be coming back now that companies are forcing us back into the office
It starts sounding like the big real estate crash or back in the 2000.😬
🤣 "Trust us!"
And we worry about China.
China is about to implode
China was a bad investment, and when it finally collapses entirely there is a good chance that Blackrock will be among the first to go down after.
Once the regular everyday investors realize they've been duped, it will be too late. Losing billions and probably all of their retirement savings.
I ditched my wife’s REIT fund last year. It had been a decent and safe investment for years but I looked at their portfolio and saw they were largely into college residential property. Lots of students are choosing to study at a local school or online. Not much need for a pricey apartment then. And I don’t see it changing anytime soon.
You don’t know anyone who wants to pay over 50k a year to go and get kicked out for practicing their first amendment?
So you did a Peter Lynch gut analysis. Good for you. .
most of them do this. also the ones that do it best usually rise to the top.
its very difficult for outsiders investors to be able to verify if stats companies spew are not meant to mislead. all kinds of tricks they pull to skew the stats spewed to the public. the public uses that to make decisions and there is alot of incentives to distorts those numbers.
I'm more concerned about the high return then the lack of liquidity. Its known that estate is not easy to liquidate. So its a bit normal not to be able to return invested money all at one time.
Other “comparable “ funds are heavily invested in offices -their value is substantially less than Black stone -another law firm looking for a payout
WP Carey, Realty Income, and Gladstone are much better and transparent funds.
US homeownership rate is at a record high. REITs in theory can hire property management companies that maintain and rent houses more efficiently than individuals
Uh, no. Ordinary families should own their own home. But keep shilling for the evil corporations. I'm sure they care for you as much as you do them
@@hieronymusvonlipschitz A house is a depreciating asset that generally rumbles to dust in 100 years with or without 1% maintenance investment per year. That is the hidden rip-off. A mortgage is renting money from the bank for roughly 30 years. Some have the talent to turn that 30 year mortgage into a 45+ year mortgage
Here we go again. Bets on any jail times, significant victim reimbursements & fines? In "The Wallstreet Code," pensions & public endowments/money was called "dumb money," used for the riskier betting games.
Geeze of all the investment too make this would be the worst. Why are people still invested in it?
The NAV is great.
Source: Trust me bro.
Sincerely, Blackstone
Commercial real estate wasn’t always risky. It only became risky during/after the pandemic when people didn’t return to office.
Right well risk analysis includes things like, what happens if demand dries up? Disaster planning is a routine element of due diligence.
@@mikerooney7600Realty Income, Gladstone, and WP Carey are all in much better positions than Blackstone because that's what those companies do, it's not a side scam for them.
Meanwhile ur life today
UHHH
In 3 yrs
Median Household Income Negitive-3%
Retail Gas+39%
Ground Beef+37%
Automobiles+34%
White panbread+33%
Sliced bacon+19%
Milk+18%
Deodorant+38%
cooking Oil+36%
Eggs+41%
Bleach+43%
RAMEN+43%
Dog Food +36%
Snack food /chips+27%
Auto repair/Tires+26%
>St Louis Fed.
Bernie Madoff 2.0😮
It doesn't matter if it is $0.01 or $1 trillion.
Look before investing in a cyclical sector such as real estate, look a the earnings in the worst of the last 10 years. If the earnings in the worst of the last ten years per share multiplied by ((1+(1/(the price/earnings ratio of the stock market)) raised to the number of years since then)-1), divided by the current price per share is more than twice the dividend yield of the fund, likely that dividend is going to be cut.
This can be done by looking at the top 10 holdings, the fund itself, or the top ten public companies in the sector.
It's all about the fees that's why they offer so much to get your money into their accounts get your money out of hedge funds and private equity it's about Greed.
Unless they are lying about the holdings these look like solid investments. Industrial, multi-family, residential are not going anywhere. Commercial is going to crash, they don’t have much of this. I see this in my community, average families can’t buy a house because they are bidding against these equity funds. They are largely responsible for the real estate bubble.
Just because a professional manages the money of their clients doesn't mean that they automatically follow a fiduciary duty. Some professionals work for brokerage firms that aren't registered as investment advisors, and as a result, are not bound by fiduciary duty.