The firm advised CBS Corporation on its 1988 sale of CBS Records to Sony to form what would become Sony Music Entertainment. : 144–147 He left Blackstone in 1999 to start his own private equity firm, Heartland Industrial Partners, based in Greenwich, Connecticut. Stockman led many key deals in his time at the firm, but had a mixed record with his investments. The growth firm also recruited politician and investment banker David Stockman from Salomon Brothers in 1988. Nikko's investment allowed for a major expansion of the firm and its investment activities. Īs the business grew, Japanese bank Nikko Securities acquired a 20% interest in Blackstone for a $100 million investment in 1988 (valuing the firm at $500 million). They also planned to use a Blackstone fund to invest in financial institutions and help build an asset management business specializing in fixed income investments. The two founders, who had previously run the mortgage-backed securities divisions at First Boston and Lehman Brothers, respectively, initially joined Blackstone to manage an investment fund and provide advice to financial institutions. In 1987 Blackstone entered into a 50–50 partnership with the founders of BlackRock, Larry Fink (current CEO of BlackRock), and Ralph Schlosstein (CEO of Evercore). īlackstone also ventured into other businesses, most notably investment management. The largest investors in the first fund included Prudential Insurance Company, Nikko Securities and the General Motors pension fund. After two years of providing strictly advisory services, Blackstone decided to pursue a merchant banking model after its founders determined that many situations required an investment partner rather than just an advisor. : 45–56 Blackstone finalized fundraising for its first private equity fund in the aftermath of the October 1987 stock market crash. Blackstone co-founder Peter Peterson was the former chairman and CEO of Lehman Brothersįrom the outset in 1985, Schwarzman and Peterson planned to enter the private equity business but had difficulty in raising their first fund because neither had ever led a leveraged buyout.
and Shearson Lehman Brothers, collecting a $3.5 million fee. Blackstone advised on the 1987 merger of investment banks E. īlackstone was originally formed as a mergers and acquisitions advisory boutique. Altman, another Lehman veteran, left his position as a managing director of Lehman Brothers to join Peterson and Schwarzman at Blackstone in 1987, but left in 1992 to join the Clinton Administration as Deputy Treasury Secretary and later founded top advisory investment bank Evercore Partners in 1995. At Lehman, Schwarzman served as head of Lehman Brothers' global mergers and acquisitions business. The two founders had previously worked together at Lehman Brothers. "Schwarz" is German for "black" "Peter", "Petros" or "Petra" (Πέτρος and πετρα, the masculine and feminine rendering of the word, respectively), in Greek means "stone" or "rock". : 45–56 The founders named their firm "Blackstone," using a cryptogram derived from the names of the two founders (Schwarzman and Peterson). Schwarzman with $400,000 in seed capital. ( leveraged buyout and the venture capital bubble)īlackstone was founded in 1985 by Peter G. Schwarzman, who had previously worked together at Lehman Brothers. īlackstone was founded in 1985 as a mergers and acquisitions firm by Peter G. As of Q1 2023, the company's total assets under management were approximately US$991 billion, making it the largest alternative investment firm globally. Blackstone is also active in credit, infrastructure, hedge funds, insurance, secondaries, and growth equity. Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate business has actively acquired commercial real estate. is an American alternative investment management company based in New York City.
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