Blackstone exec: Private equity recovery soon

NEW YORK (CNNMoney.com) -- An executive at the private equity firm Blackstone Group said that the industry, which took a hit in this summer's credit market crisis, will make significant strides toward recovery in the months ahead.

Speaking at the Dow Jones' Private Equity Analyst conference in New York, Blackstone President Hamilton "Tony" James said he anticipated that in the coming months the private equity market will return to the slower pace of dealmaking activity it saw three or four years ago. But he warned that outlook could be derailed if the economy slips into a recession.

James, who helps lead one of the biggest private equity firms in the United States, added that the breakneck pace of leverage buyout offers that lead up to the credit crisis probably won't return for some time.

"It will take a while to get back to full volume," said James, speaking to an audience of about 450 individuals, many from the private equity field.

James said his firm had been preparing for a difficult credit market since last year.

Given the current credit climate, Blackstone is focusing on other areas to drive profitability, including investing in emerging markets such as China and India, corporate turnarounds and structured equity products, James said.

He added that Blackstone - unlike some of the big Wall Street banks such as Bear Stearns (Charts, Fortune 500) and Lehman Brothers (Charts, Fortune 500), which got stung by their exposure to the subprime mortgage market - profited handsomely after it made bets two years ago that the subprime mortgage sector would sour.

But Blackstone shares have suffered alongside the rest of the financial sector, having fallen about 27 percent since the company went public in June.

Blackstone (Charts) stock climbed over 1 percent in Thursday afternoon trade on the New York Stock Exchange.