The Blackstone Group (NYSE: BX) is an alternative asset manager and provider of financial advisory services. Originally an M&A boutique, Blackstone's current activities involve a broad range of both advisory and investment expertise. Its investing activities are spread among private equity funds, real estate opportunity funds, and a variety of hedge funds. In addition to advising on mergers and acquisitions, the firm also advises institutional clients on matters such restructuring and reorganization and fund placement. As of March, 2007, Blackstone had $78.7 billion in assets under management. While the company's operational performance has benefited from a boom in the private equity industry, the debt market, which is key to private equity's operations, has been showing signs of contracting due in large part to the subprime lending crisis. This growing credit crunch could make it difficult for Blackstone to continue realizing the same high level of returns. Interest rates are a key metric for any Blackstone investor to watch - private equity companies borrow billions of dollars from banks to fund their purchases of companies. Then they use the companies' own revenues to pay off this debt, or else re-sell the company at a profit. Low interest rates make it cheap for companies like Blackstone to do business. When interest rates rise, it becomes more difficult for them to buy and resell companies at a profit.

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