Blackstone Mortgage Trust, Inc. · NYSE:BXMT
Blackstone Mortgage Trust — Capital Trust — Investor Presentation (May 2006)
28 slides from Blackstone Mortgage Trust's investor presentation, May 9, 2006
Slide 1: Company Presentation May 2006
Exhibit 99.1 Company Presentation May 2006
Slide 2: Disclaimer
Disclaimer Except for historical information contained herein, the statements in this presentation regarding the Company's business, strategy, portfolio management and results of operations are forward-looking statements that are dependent upon certain risks and uncertainties, including those relate
Slide 3: Table of Contents
I. Overview II. Investment Strategy III. Financial Information TABLE OF CONTENTS
Slide 4: Overview
o CAPITALTRUST
Slide 5: Capital Trust
Capital Trust Largest dedicated commercial real estate subordinate debt investor in the US Founded by Sam Zell and John Klopp in 1997 Originated $6.6 billion of investments since inception Unparalleled track record Less than 1.0% loss experience on the entire portfolio Fully integrated internal mana
Slide 6: Unique Business Model
OVERVIEW I - 2 CT Investment Management Co., LLC (TRS) 100% CT Mezzanine Partners II LP Unique Business Model Balance Sheet Net Interest Margin Investment Management Fee Income CT Mezzanine Partners III, Inc. + Capital Trust, Inc. (NYSE: “CT”) (Management Contracts) Investment Manager CDO Collateral
Slide 7: Recent Highlights
OVERVIEW I - 3 Recent Highlights Originations Q1 2006 originations of $440 million on balance sheet (through 3/31/06) Capital Raising Closed first Trust Preferred Securities offering (2/06): $50 million at 7.45% Closed fourth CDO (3/06): $429 million at Swaps + 0.43% / 0.55% Financial Performance (3
Slide 8: Share Price (Close)
NYSE: CT Share Price (Close) Current (5/4/06) $31.58 High (5/31/05) $34.97 Low (10/11/05) $28.87 Valuation Metrics CT Peers (1) Price/Book 1.4x 1.5x P/E TTM 10.6x 12.3x Div. Yield 7.6% 9.1% Daily Volume Average (5/4/05-5/4/06) 35,795 Trailing 12-Month Performance 3Q’ 05 Div. Note: (1) Peer group inc
Slide 9: Growth Strategy
OVERVIEW I - 5 Growth Strategy Continue to grow balance sheet assets Continue to grow investment management business through the sponsorship of additional funds Create the most efficient capital structure through the use of CDOs and other structured products Expand our franchise Incubate and/or acqu
Slide 10: Seasoned Management Team
Lending/Investing Asset Management Administration Finance Capital Markets CEO, John Klopp Board of Directors Sam Zell Thomas Dobrowski Martin Edelman Craig Hatkoff Edward Hyman John Klopp Henry Nassau Josh Polan Lynne Sagalyn OVERVIEW I - 6 38 Professionals CFO, Geoffrey Jervis COO, Stephen Plavin S
Slide 11: Seasoned Management Team
Lending/Investing Asset Management Administration Finance Capital Markets CEO, John Klopp
Slide 12: Investment Strategy
Investment Strategy
Slide 13: A Large and Dynamic Market
II - 1 Note: (1) Source: Federal Reserve Data. INVESTMENT STRATEGY A Large and Dynamic Market CMBS has taken a larger share of a growing market Market Growth 3x CMBS Growth 9x
Slide 14: Growth of Securitization
II - 2 INVESTMENT STRATEGY Growth of Securitization Record issuance of $169 billion in 2005 (1)
Slide 15: Evolving Capital Structure
Equity 1 st Mortgage A Note Equity Equity IG CMBS Equity Traditional Early Stage Mezzanine Current Multiple Tranches of Subordinate CMBS, B Notes, Mezzanine Loans and Preferred Equity Evolving Capital Structure INVESTMENT STRATEGY II - 3
Slide 16: Relative Value
Equity AAA to A CMBS BBB AAA to A CMBS BBB Equity II - 4 Senior B Note Junior B Note Junior Mezzanine Senior Mezzanine L + 125 to 175 bps L + 175 to 300 bps L + 300 to 400 bps L + 400 to 1000+ bps INVESTMENT STRATEGY Relative Value B BB NR Gross Unleveraged Returns Gross Unleveraged Returns L + 15 t
Slide 17: Collateralized Debt Obligation Model
IG CDO Notes CDO Equity Sold to 3 rd Parties Retained by Capital Trust II - 5 Below IG CDO Notes INVESTMENT STRATEGY Collateralized Debt Obligation Model Mezzanine Loans B Notes Subordinate CMBS CDO I $324 million / Reinvesting CDO II $338 million / Reinvesting CT CDO III $341 million / Static CT CD
Slide 18: Competitive Advantages
II - 6 INVESTMENT STRATEGY Competitive Advantages Investment Origination Broad Network/Established Relationships Structural Creativity and Flexibility Quick Turnaround/Certainty of Closing Transaction Execution Credit Underwriting Expertise Financial Structuring Experience Proven Process Capital Acc
Slide 19: Senior Debt Provided by Various Lenders
Senior Debt Provided by Bank of America Sotheby’s Building New York, NY $235 Million Senior Debt Provided by Nomura 401 East Ocean Boulevard Long Beach, CA $14 Million Senior Debt Provided by Merrill Lynch GGP Portfolio Nationwide $1 Billion Senior Debt Provided by IXIS Real Estate Capital Liberty P
Slide 20: Investment Process
Origination Asset Mgmt. Approval Underwriting II - 8 Originators Due Diligence Senior Lenders Borrowers Brokers Deal Team Business Credit Team Finance/Capital Markets Team Legal Structure Investment Committee Board of Directors Credit Providers Partners Asset Mgmt. Team Credit Team Finance/Capital M
Slide 21: Risk Management Principles
II - 9 INVESTMENT STRATEGY Risk Management Principles Create diversified portfolios Asset category, property type and geographic market Prudently employ leverage Enhance returns Increase the size and diversity of the portfolios Manage a matched book Control asset/liability mix (index & duration) Use
Slide 22: Capital Trust, Inc. Structure and Balance Sheets
Capital Trust, Inc. 3/31/06 Assets $1,918 Liabilities $1,571 Equity $348 CT Investment Management Co., LLC (TRS) (100% owned) (Management Contracts) CT Mezzanine Partners II LP 3/31/06 Assets $62 Liabilities $39 Equity $23 (4.7% owned) (5.9% owned) III - 1 Net Interest Margin Base and Incentive Mana
Slide 23: Financial Information: Assets
III - 2 FINANCIAL INFORMATION Assets ($000s) Assets Cash Loans CMBS Fund Investments Total Return Swaps Interest Rate Hedges (Swaps) Other Total Assets Liabilities Secured Debt CDO Debt Junior Sub. Debentures Other Total Liabilities Common Equity 3/31/06 $8,658 1,030,339 814,873 14,307 5,138 7,677 3
Slide 24: Portfolio Breakdown
III - 3 FINANCIAL INFORMATION Portfolio Breakdown Notes: (1) Capital Trust portfolio as of 3/31/06. Location excludes CMBS.
Slide 25: Liabilities and Equity
Assets Cash Loans CMBS Fund Investments Total Return Swaps Interest Rate Hedges (Swaps) Other Total Assets Liabilities Secured Debt CDO Debt Junior Sub. Debentures Other Total Liabilities Common Equity 3/31/06 $8,658 1,030,339 814,873 14,307 5,138 7,677 37,326 $1,918,318 $247,881 1,253,068 51,550 18
Slide 26: Investment Management
CT Investment Management Co., LLC (TRS) CT Mezzanine Partners II LP 3/31/06 Assets $64 Liabilities $39 Equity $23 III - 5 FINANCIAL INFORMATION Investment Management $1.2 billion of investments Investment period expired 1.3% mgmt. fee per annum 20% of profits after 10% pref. return and 100% return o
Slide 27: Income Statement
Portfolio Net Interest Margin Interest Income Interest Expense Net Interest Margin Other Revenue Fund Management Fees Fund Investment Income Other Subtotal Other Expenses G&A D&A Subtotal Income Taxes Net Income Net Income per share (diluted) Dividends per share 3/31/06 $31,633 17,269 14,364 1,286 5
Slide 28: Conclusion
FINANCIAL INFORMATION III - 7 Conclusion Dominant franchise in an attractive/growing market niche Organic growth through: Balance sheet investments – net interest margin Assets under management – base and incentive management fees Stable capital structure through the use of CDOs and other structured