Blackstone’s Last Resort. Goes Into Clean Tech.

• Blackstone Group (NYSE: BX), the hyped global alternative asset manager which businesses include Corporate Private Equity, Real Estate, Marketable Alternative Asset and Financial Advisory, has been on the fritz the last few months.
• Net Income for the Q3 2008 was a loss of $(509.3) million as compared to $99.9 million in the Q2 of 2008 and $299.2 million in Q3 of 2007. Their stock price has dove from a high of $24 this year to the current price of $6.27.
• What’s their grand plan to get back into the Black (no pun intended)? They are adding a new asset arm which includes green tech. Today they announced that they have led the Series C financing of Cellulosic ethanol start-up Coskata. The financing round was shared by two other investment groups besides Blackstone and totalled $40 million (JP Morgan Chase was supposed to be involved, but backed out)
• Coskata is working on mainstreaming a system that produces next-generation ethanol from non-food feedstocks at an operating cost of $1 per gallon. They will use the funding to complete their demonstration facility set to launch in early 2009. That first plant is expected to be able to produce 40,000 gallons of cellulosic ethanol per year when it’s complete.
• A company as unstable as Blackstone at the moment moving into Green Tech is an exceptional risky move at the moment as it is still one of the industries yet to feel the recession due to so many venture groups trying to bet on what the ‘first’ great mainstream technology will be.
• One point that worries me specifically is the scalability of the celusoic ethanol. The US consmes 19.6 million barrels of oil per day, which equates to 607.6 million gallons per day and 221 billion gallons per year. Coskata’s first plant will be able to replace about .0000002% of our oil dependence. Great.
• I am all for green tech, but when an investment like this from such a massive buyout firm is coming in, and things on the frontline are looking weaker than ever, it makes the management look entirely vulnerable. I would be vary wary of Blackstone in the coming quarters. Don’t look for green to save them. If they should have invested in something that looks like it will be gaining traction, Project Better Place is in a far better position in Cleantech. E2T

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