Born on February 14th, 1947 in Philadelphia, Pennsylvania, Stephen Schwarzman may not be the most well-known financier and business magnate. However on Wall Street, the heads of major corporations know him very well. Still though, he remains out of the limelight while making major deals with other large companies. As the chairman and CEO of the Blackstone Group, a financial advisory and private equity firm, his net worth is estimated at $12.9 billion. Schwarzman established the Blackstone Group with former United States Secretary of Commerce Pete Peterson in 1985.
Schwarzman is a graduate of Yale University and attended at the same time as George W. Bush. Both were in the Skull and Bones society together. After graduating from Yale, he went to Harvard Business School and graduated in 1972. His first job out of college was with Donaldson, Lufkin and Jenrette within the financial services department. Eventually he left the company and began working at Lehman Brothers investment bank. At the young age of 31, he reached the rank of managing director and eventually rose to the top to become the head of Lehman Brothers’ global mergers and acquisitions unit.
He then left during the mid-1980’s to start Blackstone in 1985. The company went public in June 2007 and Schwarzman was listed as one of Time Magazine’s 100 Most Influential People in the World. From 2004 to 2010, Schwarzman was the chairman of the board of Trustee of the John F. Kennedy Center for the Performing Arts and served as an adjunct professor at Yale School of Management. Again in 2015 Schwarzman was honored with being one of Bloomberg’s 50 Most Influential people of the year.
2007 and Beyond
Over the past eight years, Blackstone’s influence under Schwarzman has been incredible. Since the financial crisis in the mid-to-late 2000’s, the assets from Blackstone have almost quadrupled. Of its 2,070 employees, over 85-percent have joined since 2007. Meanwhile, the organization has launched dozens of new products in a variety of markets when most companies were scarce on releasing new items due to a lack of money in the economy. Also, since that time, Blackstone has added large stakes in 92 global companies with the largest being Hilton Hotels, Versace, Michaels Stores, and Leica Camera.
Also, Blackstone owns thousands of commercial real estate properties around the world including Chicago’s Willis Tower and Manhattan’s Stuyvesant Town. The firm also owns more single-family homes in the United States than any other private equity company. In almost every sector Blackstone operates, they have emerged at the top as the leader. All of this success can be attributed to Schwarzman at the helm of the company.
The fund doesn’t lose money
Despite the fluctuations in the market, incredibly, Blackstone has not had a single fund lose money since its first launch in 1987. The company’s average annual returns across multiple sectors include 20-percent in real estate funds, 19-pecent in private equity funds and 14-percent in credit funds; all of which have overpowered the S&P 500. As a result, the company has experienced an annualized return of 9.7-percent across 30-years in the business. According to Schwarzman, Blackstone has a system that works well. Experts always have the perception that consistently producing excellent returns across 30 years will stop in year 31. However, this does not happen when a strong system is in place to continue making the company money.
With all of this success, Schwarzman is well-known for his grandiosity over the years. He is the owner of John D. Rockefeller Jr.’s former apartment which is a 34-room triplex on Park Avenue. Schwarzman is also the owner of oceanfront properties in East Hampton, Jamaica, Palm Beach and Saint-Tropez. Simultaneously, he has also been extremely generous and visible within philanthropy. In 2008, he donated $100 million to the New York Public Library system and received his name on an emblem at the main branch. In 2015, he donated $150 million to Yale in order to construct the Schwarzman Center, which is a remake of Yale’s 115-year-old Commons only with 88,300 square-feet in a state-of-the-art complex. The Center will serve as a multi-function room for dining, exhibition, meet and performance spaces.
At Beijing’s Tsinghua University, he also launched the Schwarzman Scholars program consisting of another $100 million. This is his version of the prestigious Rhodes scholarship fund. Additionally, he is currently working with publishers on a new book. Despite all of this grandeur and excess, Schwarzman is not one with whom you would expect flashiness. However, in 2007, held a $3 million birthday bash in New York City’s Park Avenue Armory which featured Martin Short, Rod Stewart and Patti LaBelle.
He’s a target
Recently, in each election year, every United States presidential candidate continues to bash Wall Street so when you are on an unstoppable path in the finance industry, it is the same as wearing a scarlet letter. Schwarzman is always a target for politicians and other businessman-alike. When he first started in the finance industry, it was considered to be a very prestigious sector. However, after the greed that ensued during the 1980’s and with numerous arrests for financial crimes, Wall Street big wigs are now seen as being greedy and uncaring, despite their philanthropic efforts.
Minus a few blunders here and there, we are all human in-fact, Schwarzman has managed to remain out of the limelight and focus on what he does best, running his business. As a result, he has continuous success and has been consistently making money hand-over-fist when other firms were being bailed out by the United States Government. Based on his past, present and estimated future success, he will continue to be an unstoppable force on Wall Street.