Blackstone Mortgage Trust, Inc. · NYSE:BXMT
Blackstone Mortgage Trust — Capital Trust — Investor Presentation (August 2005)
28 slides from Blackstone Mortgage Trust's investor presentation, Aug 18, 2005
Slide 1: Company Presentation, August 2005
Exhibit 99.1 Company Presentation August 2005
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: Capital Trust
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 $5.3 billion of investments since inception Unparalleled track record Less than 0.75% loss experience on the entire portfolio Fully integrated internal man
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 Collateralized Debt Obligations Capital Trust RE CDO 2004-1 (7/04): sold $253 million of investment grade securities backed by $324 million of BB/B subordinate real estate debt Capital Trust RE CDO 2005-1 (3/05): sold $299 million of investment grade securities backe
Slide 8: Share Price and Valuation Metrics
NYSE: CT Share Price (Close) Current (8/15/05) $32.92 High (5/31/05) $34.97 Low (8/13/04) $24.35 Valuation Metrics CT Peers (2) Price/Book 1.6x 1.5x Price/EPS 14.0x 13.8x Div. Yield (TTM) 6.3% 6.7% TTM Return 38.9% 31.9% Daily Volume Average (1/01/04-7/22/04) 15,561 Average (7/23/04-8/15/05) 39,477
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: Management and Board of Directors
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
Slide 11: Investment Strategy
Investment Strategy
Slide 12: 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 2x CMBS Growth 8x ($52B) ($423B)
Slide 13: Growth of Securitization
II - 2 INVESTMENT STRATEGY Growth of Securitization Record issuance of $93 billion in 2004 Note: (1) 2005 YTD as of 6/30/05.
Slide 14: Evolving Capital Structure
Equity 1 st Mortgage A Note Equity IG CMBS Equity II - 3 Traditional Early Stage Mezzanine Current Multiple Tranches of B Notes, Mezz.Loans, Preferred Equity and CMBS INVESTMENT STRATEGY Evolving Capital Structure
Slide 15: Securitized Capital Structures
AAA A AA BBB Equity Equity Equity Equity AAA A AA BBB Equity Equity Equity Equity II - 4 Floating Rate $13 Billion 2004 INVESTMENT STRATEGY Securitized Capital Structures Fixed Rate $80 Billion 2004 B Note/ Mezz B Note/ Mezz B Note/ Mezz B Note/ Mezz B BB NR
Slide 16: Relative Value
Equity AAA to A CMBS BBB AAA to A CMBS BBB Equity II - 5 Floating Rate 5 – 15%+ Senior B Note Junior B Note Junior Mezzanine Senior Mezzanine L + 150 to 225 bps L + 225 to 375 bps L + 375 to 500 bps L + 500 to 1000+ bps INVESTMENT STRATEGY Relative Value B BB NR Fixed Rate Gross Unleveraged Returns
Slide 17: Collateralized Debt Obligation Model
IG CDO Notes CDO Equity Sold to 3 rd Parties Retained by Capital Trust II - 6 Below IG CDO Notes INVESTMENT STRATEGY Collateralized Debt Obligation Model Mezzanine Loans B Notes Subordinate CMBS Capital Trust RE CDO 2004-1 $324 million of collateral / Reinvesting Capital Trust RE CDO 2005-1 $338 mil
Slide 18: Competitive Advantages
II - 7 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 Lenders on Selected Investments
Senior Debt Provided by Bank of America 717 Fifth Avenue New York, NY $165 Million Senior Debt Provided by Wells Fargo DRA/DDR Portfolio Nationwide $175 Million Senior Debt Provided by Merrill Lynch GGP Portfolio Nationwide $1 Billion Senior Debt Provided by IXIS Real Estate Capital Cerberus Hotel P
Slide 20: Investment Process
Origination Asset Mgmt. Approval Underwriting II - 9 Originators Due Diligence Senior Lenders Borrowers Brokers Deal Team Business Credit Team Finance/Capital Markets Team Legal Structure Investment Committee Board of Directors Credit Providers Partners Asset Mgmt. Team Credit Team Finance/Capital M
Slide 21: Risk Management Principles
II - 10 INVESTMENT STRATEGY Risk Management Principles Create diversified portfolios Asset category, property type and geographic market Prudently employ leverage Enhance returns Increase the size and diversity of the portfolios Manage a matched book Control asset/liability mix (index & duration) Us
Slide 22: Financial Information
Financial Information
Slide 23: Capital Trust, Inc. Structure ($ millions)
Capital Trust, Inc. 6/30/05 Assets $1,033 Liabilities $714 Equity $319 CT Investment Management Co., LLC (TRS) (100% owned) (Management Contracts) CT Mezzanine Partners II LP 6/30/05 Assets $84 Liabilities $56 Equity $28 (4.7% owned) (5.9% owned) III - 1 Net Interest Margin Base and Incentive Manage
Slide 24: Financial Information: Assets
III - 2 FINANCIAL INFORMATION Assets ($000s) Assets Cash Loans Fixed Rate Variable Rate CMBS Fund Investments Total Return Swap Other Total Assets Liabilities Secured Debt CDO Debt Interest Rate Hedge (Swap) Other Total Liabilities Common Equity 6/30/05 $17,314 101,524 611,963 257,755 20,732 4,000 1
Slide 25: Liabilities and Equity
Assets Cash Loans Fixed Rate Variable Rate CMBS Fund Investments Total Return Swap Other Total Assets Liabilities Secured Debt CDO Debt Interest Rate Hedge (Swap) Other Total Liabilities Common Equity 6/30/05 $17,314 101,524 611,963 257,755 20,732 4,000 19,849 $1,033,137 $144,015 551,691 2,381 16,37
Slide 26: CT Investment Management
CT Investment Management Co., LLC (TRS) CT Mezzanine Partners II LP 6/30/05 Assets $84 Liabilities $56 Equity $28 III - 4 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 Base 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 6/30/05 $18,912 7,631 11,281 2,7
Slide 28: Conclusion
FINANCIAL INFORMATION III - 6 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