Paulson Joins PE Firms on $3.9B Deal

by Marc Raybin ,Editor October 11, 2010

After working through bankruptcy proceedings for a year, Extended Stay hotels has emerged with a new consortium of owners in a deal valued at $3.925 billion.

Private equity firms Centerbridge Partners and The Blackstone Group have teamed with hedge fund firm Paulson & Co. on the deal to acquire the hotel chain. The group’s deal to buy Extended Stay was approved by the bankruptcy court in July as part of the reorganization plan.

As part of the deal which has now closed, Extended Stay reduced its debt load by nearly $5 billion, according to a statement.

A spokesman from Paulson & Co. said the firm was not commenting on the deal beyond the statement. A representative from Centerbridge did not return a message seeking additional information about the deal, and a spokesperson from Blackstone did not immediately return a message.

HVM, the former owner of Extended Stay, will continue to manage the properties, according to the statement. All 685 properties in the Extended Stay portfolio remained open during the year-long bankruptcy proceedings and will continue to be managed by HVM.

Extended Stay is based in Spartanburg, S.C. The company has locations throughout the United States and Canada, employing 9,000 people. The new ownership will look to make property improvements and renovations, according to the statement.

Doug Geoga has become the non-executive chairman of the board at Extended Stay with the closing of the deal. He was previously the president of Global Hyatt Corp.

Centerbridge has $12 billion in capital under management. Limited partners in the firm’s funds include university endowments, pensions, sovereign wealth funds and charitable trusts. The firm was founded in 2006, focusing on private equity and credit investments.

Paulson & Co. was founded in 1994 by John Paulson, one of the most prominent hedge fund managers in the asset class. His firm has $32 billion in assets under management in offices in New York and London.

Blackstone is one of the biggest alternative asset managers in the business. The firm manages a variety of private equity funds, hedge funds, and real estate funds. It also has an advisory business.

Source: www.hedgefund.net

Paulson Could Win Big on Gold: Report

by Paula Schaap ,Senior Reporter , September 24, 2010

Hedge fund manager John Paulson reportedly could be going all out on gold in an attempt to make a killing if the precious metal continues its climb.

Paulson’s $600 million gold fund is up 15% through August, according to a Forbes report.

Besides gold ETFs, Paulson’s fund is invested in gold mining companies, a fairly typical play by hedge fund managers.

George Soros and David Einhorn have also invested in ETFs and miners, using their bets as a hedge against inflation.

Recently, however, Soros said he thought gold could be the “ultimate bubble.”

Gold closed at $1,294.50 per troy ounce Thursday, an all-time high.

Source: www.hedgefund.net