What started in 1985 as a tiny advisory business with a mere $US400,000 on its balance sheet has ballooned into the industry’s top player under his watch, with $US368 billion in assets under management.
Part of Schwarzman’s magic, he acknowledged in an interview with Jason Kelly of Bloomberg Markets, has been his ability to make detached business decisions. A master of controlling risk, the king of private equity refuses to let emotion cloud his vision.
“I don’t get emotional about business decisions,” Schwarzman told Bloomberg, which pegs his net worth at $US11.9 billion. This helps explain how he’s been able to grow the firm exponentially — even throughout the financial crisis, when many competitors faltered — without suffering serious setbacks that threatened the firm’s long-term prospects.
But even Schwarzman isn’t completely stoic, he admits.
There’s one business decision he says that took a deep emotional toll on him: When Blackstone spun off its M&A advisory business — the line of work where Schwarzman got his start on Wall Street — back in 2014.
“I was emotional about that. It’s where we started the firm,” Schwarzman said. “I always enjoyed the business because I viewed it not just as a profit center but as a flag carrier for the firm — and, in effect, free advertising.”
I was personally the last person to agree that spinoff was the right thing to do. It was very painful for me and carried a real sense of loss, but even I realised that the people in our advisory businesses would do better being separate. It was the right thing for them. And I just looked at the stock the other day. When we spun out our advisory businesses and it combined with Paul Taubman, who now runs the business, to become PJT Partners, the stock went as low as $US20. Now it’s almost twice that, which was the same value we thought it should be back when we did the spinoff.
Impressively, even when Schwarzman was emotionally invested in a significant corporate move for the firm, he ultimately managed to check himself and make a grounded decision that was best for Blackstone.
Schwarzman’s full interview with Kelly is worth a read. Check it out at Bloomberg Markets.
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