Fund Manager Says Blackstone Already Peaked

Kenneth Heebner isn't buying Blackstone's hype -- and will steer clear of its stock. The CGM Capital Management strategist joined "Closing Bell" to tell CNBC's Erin Burnett and David Faber why investors may be disappointed when Blackstone takes its private-equity business public.

Faber reported earlier Tuesday that Blackstone will price its IPO on Thursday -- days earlier than previously planned.

But despite the market excitement, Heebner advised viewers that "this stock may well go up" -- but "it won't go up as much as others."


Heebner, portfolio manager for the CGM Realty Fund and CGM Focus Fund, believes interest rates are going to rise steadily, hindering Blackstone's ability to invest. He declared that Blackstone is actually "selling at the peak" of operating earnings.

And the portfolio strategist thinks it's not only Blackstone that has reached its zenith: Due to rising rates and other factors, Heebner sees the industry "past its prime," and predicts that in the near future, "you might find mutual funds outperforming hedge funds."

Besides, Heebner asked rhetorically, "Why buy this [Blackstone], when you can buy Schlumberger at 17 times earnings?"

Contact Street Signs

  • Showtimes

    United States
    Monday - Friday 2:00P ET
    Monday - Friday 20:00 CET
    Tuesday - Saturday 02:00 SIN/HK
    Tuesday - Saturday 04:00 SYD
    New Zealand
    Tuesday - Saturday 06:00 NZ
  • "Street Signs" Co-Anchor

  • Co-anchor of CNBC's "Street Signs," Amanda Drury is based at the network's global headquarters in Englewood Cliffs, N.J.