Blackstone and TPG are providing their investors with dramatically different valuations for one of their biggest common holdings, Freescale Semiconductor, highlighting the latitude that private equity funds enjoy in preparing such estimates.
Blackstone and TPG each contributed about $1bn in equity for the $16.6bn leveraged buy-out of Freescale, a semiconductor manufacturer, in December 2006 – one of the biggest private equity deals of the last cycle.
In a first-quarter update for investors, dated June 11 and reviewed by the Financial Times, the Blackstone Capital Partners V fund valued its Freescale holding at 45 cents on the dollar, up from 20 cents at the end of the fourth quarter. By contrast, the TPG V fund's first-quarter update, dated May 28 and reviewed by the FT, estimated that its stake was worth 20 cents on the dollar.