Blackstone's $26bn Hilton acquisition has been dubbed a bad deal in this week's edition of US business magazine Barron's.
The magazine suggested that Blackstone's $5bn of equity in the deal was nearly worthless.
According to the report, Hilton generated $1.8bn of cash flow in 2008, a rise of 13%. But this leaves the $20bn debt at around 11 times cash flow. Starwood's equity is currently valued at less than seven times trailing cash flow.
Given deteriorating operating conditions, Hilton's cash flow is set to worsen. Barron's puts the drop at 15% or more.
Barron's called on private equity firms like Blackstone to value their investments at their current worth. And it warned that many deals are so far under water that they may not be worth much by the time the firms execute their exit strategies.