Blackstone: Dial L for leverage

Private equity people say they don’t make outsize returns simply by employing leverage. Yet that ‘s the only way to make sense of Blackstone’s E2.7bn investment this week in Germany’s Deutsche Telekom. This is a really odd deal. DT’s earnings are forecast to grow by a mere 5.6% annually over the next three years, according to Factset. But Blackstone has a limited ability to turn it around. Publicly-listed DT is so huge that Blackstone only gets a 4.5% stake and an expected seat on the board. Bu...