The Blackstone IPO, Net Worth Edition

How did Steve Schwarzman end up with so much more of Blackstone

Group than Pete Peterson? Their take-home pay last year was

not so far apart: Schwarzman earned $398 million, while Peterson earned $213

million. But in the upcoming

IPO, Peterson is going to extract $1.88 billion and keep 4% of the company.

Add the two together at $30 per share and you have a total of $3.18 billion.

A hefty sum, to be sure. But look at Schwarzman: his 24% stake in the company

is going to be worth about $8.3 billion on its own – and that doesn’t

even include the $449 million he’s extracting from the IPO, or any of the cash

he’s received over the years from the company.

At these levels, of course, money is just a way of keeping score: the marginal

effect of getting an extra dollar has long since declined to zero. And Peterson

has already said that he’s going to be giving

away a large chunk of the money in any event. But it’s interesting all the

same to see that Schwarzman’s net worth is triple that of Peterson.

It’s also worth noting some of the other Blackstone gazillionaires, post-IPO:

COO Tony James will become an overnight billionaire, while

vice chairman Tomilson Hill will have shares worth well over

$500 million.

It’s hard to see how the founders of other private-equity shops will be able

to resist the lure of these kind of riches. And it’s also easy to see how it’s

private equity companies, rather than investment banks or management consultants,

which have the pick of each year’s MBAs.

This entry was posted in private equity. Bookmark the permalink.