Blackstone governance: Governance-lite equity

Private equity firms are squeezing lenders by issuing loans with few of the market’s traditional protections. These so-called «covenant-lite» deals are an indication of frothiness in the credit markets. Investors in Blackstone’s IPO, who won’t enjoy the conventional rights of shareholders, will be placed in a similar position to its creditors. They’re being offered what might be called «governance-lite» equity. Steve Schwarzman’s firm is listing not as public company but as a «master limited pa...