Blackstone Mortgage Trust, Inc. · NYSE:BXMT
Blackstone Mortgage Trust — Capital Trust — Investor Presentation (November 2008)
28 slides from Blackstone Mortgage Trust's investor presentation, Nov 5, 2008
Slide 1: Company Presentation November 2008
Company Presentation November 2008
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
Overview o CAPITALT RUST
Slide 5: Capital Trust
Capital Trust Publicly traded (NYSE: "CT") finance and investment management company specializing in loans and securities backed by commercial real estate assets Founded by Sam Zell and John Klopp in 1997 Originated over $11.6 billion of investments since inception Unique business model Balance shee
Slide 6: Unique Business Model
OVERVIEW I - 2 CT Investment Management Co., LLC (TRS) 100% CT Mezzanine Partners III, Inc. Unique Business Model Balance Sheet Net Interest Margin Investment Management Fee Income + Capital Trust, Inc. (NYSE: "CT") (Management Contracts) Investment Manager CDO Collateral Manager Special Servicer CT
Slide 7: Board of Directors and Seasoned Management Team
Board of Directors Sam Zell Thomas Dobrowski Martin Edelman Craig Hatkoff Edward Hyman John Klopp Henry Nassau Joshua Polan Lynne Sagalyn OVERVIEW I - 3 Seasoned Management Team Capital Markets CEO, John Klopp CFO, Geoffrey Jervis COO, Stephen Plavin Finance/Accounting Administration CRE Investing &
Slide 8: Business Strategy
OVERVIEW I - 4 Business Strategy Continue to grow investment management and balance sheet businesses through the sponsorship of additional vehicles Create the most efficient and stable capital structure through a diversity of financial instruments and providers Expand our franchise Incubate and/or a
Slide 9: Investment Strategy
Investment Strategy o CAPITALT RUST
Slide 10: Global Capital Markets
INVESTMENT STRATEGY II - 1 Global Capital Markets 2006/1H 2007 represented the height of the leverage boom Current liquidity crisis and credit crunch reflects a systemic de-leveraging and re- pricing of risk Ultimate economic impact still playing out Source: JPMorgan High Grade Domestic Bond Index a
Slide 11: Debt Market Impact
INVESTMENT STRATEGY II - 2 Debt Market Impact Structured finance meltdown and the deteriorating economic environment have created uncertainty and illiquidity across all debt markets Impact of the dislocation has been acute on the securitized commercial real estate sector Source: JPMorgan, Commercial
Slide 12: Market data chart (JPMorgan, Markit)
INVESTMENT STRATEGY II - 3 Source: JPMorgan, Markit Partners
Slide 13: Market data chart (JPMorgan, Markit)
INVESTMENT STRATEGY II - 4 Source: JPMorgan, Markit Partners
Slide 14: CMBS cash buyers have stepped back
CMBS cash buyers have stepped back Spread volatility Credit concerns Structured product taint Confidence in ratings Leveraged investors have disappeared SIVs, CDOs and CP Conduits Repo availability Securitized lenders have withdrawn Pricing Other balance sheet pressures Portfolio lenders cannot fill
Slide 15: Market Capacity
INVESTMENT STRATEGY II - 6 Market Capacity Securitized lenders originated +/-50% of all CRE debt in 2006/H1 2007 Portfolio lenders (banks, insurance companies and some pension funds) represent the only active lenders in today's market Current lending universe has insufficient capacity to address fin
Slide 16: The Landscape Today
The Landscape Today Dealer inventory backlogs/forced liquidations by leveraged investors Investor uncertainty + lack of financing = markets have not cleared CMBS and loan spreads remain wide despite recent volatility However, not all collateral has been created equally Tomorrow Delinquencies and def
Slide 17: Market Opportunity
Market Opportunity Result = lenders back in the driver's seat: More conservative valuations Lower advance rates Tighter loan structures Better pricing Current market provides credit driven investors with the opportunity to generate attractive risk adjusted returns at all parts of the real estate cap
Slide 18: CT Platform
CT Platform Fully integrated platform uniquely qualified to take advantage of today's market opportunities: Broad origination/sourcing network Disciplined underwriting culture and process Deep experience with all financial products Capital access and structuring expertise: Equity Sources Debt Source
Slide 19: Asset Management
Asset Management Asset Manager for all investments since inception Directly manage all non securities related investments Approved Special Servicer (Fitch, S&P, Moody's) to directly control loan workouts for B Notes and first loss CMBS Experienced CDO collateral manager Proprietary technology platfo
Slide 20: Risk Management Principles
II - 11 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) Us
Slide 21: Financial Information
Financial Information o CAPITALT RUST
Slide 22: Corporate structure and 9/30/08 balance sheet summary
CT High Grade MezzanineSM (0.0% owned) (4.7% owned) Capital Trust, Inc. 9/30/08 Assets $3,068 Liabilities $2,589 Equity $479 CT Investment Management Co., LLC (TRS) (100% owned) (Management Contracts) III - 1 Net Interest Margin Base and Incentive Management Fees FINANCIAL INFORMATION ($ millions) (
Slide 23: Assets and Liabilities
FINANCIAL INFORMATION Assets ($000s) Assets Cash Loans CMBS Equity Investments Other Total Assets Liabilities Secured Debt CDO Debt Credit Facility Junior Sub. Debentures Participations Sold Interest Rate Hedges (Swaps) Other Total Liabilities Common Equity 9/30/08 $133,471 2,044,408 851,371 3,822 3
Slide 24: Loan Portfolio Breakdown
III - 3 FINANCIAL INFORMATION Loan Portfolio Breakdown
Slide 25: CMBS Portfolio Breakdown
III - 4 FINANCIAL INFORMATION CMBS Portfolio Breakdown 81% pre-2006 68% Investment Grade
Slide 26: Liabilities and Equity
Assets Cash Loans CMBS Equity Investments Other Total Assets Liabilities Secured Debt CDO Debt Credit Facility Junior Sub. Debentures Participations Sold Interest Rate Hedges (Swaps) Other Total Liabilities Common Equity 9/30/08 $ 133,471 2,044,408 851,371 3,822 34,647 $3,067,719 $ 816,208 1,158,787
Slide 27: CT Investment Management Co., LLC (TRS)
CT Investment Management Co., LLC (TRS) III - 6 FINANCIAL INFORMATION Investment Management: $2.6 billion of assets under management ($ millions) CT Mezzanine Partners III, Inc. 9/30/08 Assets $41 Liabilities $31 Equity $10 Inv. period expired $1.2B of investments 1.42% mgmt. fee per annum 18.5% of
Slide 28: Conclusion
III - 7 Conclusion Best in class management team Fully aligned Internally managed Significant insider ownership Unparalleled track record Unique business model: Balance sheet investments - net interest margin Assets under management - base and incentive management fees Expandable platform: Other rea
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