Some Things I Learned from James Stewart’s Steve Schwarzman Profile

It’s long, so you might want to skip the whole thing. Here are some juicy bits:

Schwarzman also owns a coastal estate in Saint-Tropez and a beachfront property in Jamaica. He typically spends summer weekends and August in East Hampton; July in Saint-Tropez; and winter weekends in Palm Beach. His children use the house in Jamaica; he rarely goes there. The five properties and their renovations appear to have cost Schwarzman at least a hundred and twenty-five million dollars. “I love houses,” he told me recently. “I’m not sure why.”

Blackstone does not own a corporate jet. Instead, it uses Schwarzman’s private jet. (In 2006, the company paid him $1.54 million for the privilege.)

Blackstone has a long history of opulent anniversary and closing dinners, often at the Four Seasons, which is referred to by some as the Blackstone cafeteria. Still, until recently Schwarzman had trouble getting a prime table in the Grill Room at lunch. According to a friend of both men, when Schwarzman asked Peterson why, his co-founder replied, “It takes more than just money.”

The "I don’t feel like a wealthy person" quote has been widely reported, but this is just classic:

Schwarzman himself says, “I’m thinking through how I want to approach that area of philanthropy. Assuming that Blackstone does well over time, and the credit markets recover, I’ll have significant resources for charitable activities.”

Dude, you’re worth well over $4 billion. Is that less than you were worth? Yes. Does it mean you don’t yet "have significant resources for charitable activities"? Um.

Stewart then introduces a string of Schwarzman anecdotes by saying that "he has a vivid memory for details". It’s up to you to decide which of them to believe; I guess – or are we meant to trust the New Yorker fact-checkers on these ones?

He likes to tell a story about how, early in one cross-country race, he slipped and broke his wrist. Determined to set a record for the course, he got up and kept running, his arm tucked against his side, and set the record. At the finish, his coach asked him what was wrong. “I broke my wrist,” Schwarzman said, then went into shock and was rushed to the hospital.

The summer before his sophomore year, while recovering from a touch-football injury, Schwarzman decided to study classical music, a subject about which he knew almost nothing. He started with Gregorian chants and worked through the repertoire chronologically, listening to recordings and reading related texts. He studied every major work and every major conductor, often spending, he claims, eight to ten hours a day listening to the stereo system. By late summer, he had reached Tchaikovsky. (A bit later on in the profile, we find Schwarzman pulling out his briefcase and working all the way through a concert at Carnegie Hall.)

Schwarzman waited in the reception area [at DLJ] for half an hour, watching as young bankers hurried past in shirtsleeves, followed by secretaries wearing short skirts and big gold earrings. “It seemed fast-moving, intense,” Schwarzman recalled. “Everyone seemed happy.” When Donaldson asked him why he wanted to work at the firm, Schwarzman replied, “Mr. Donaldson, I don’t even know what you do. But if you have such great-looking girls and intense guys then I want to do it.” Schwarzman was hired at a salary of ten thousand five hundred dollars, which, by his account, was “five hundred dollars more than anyone else in my class at Yale.” He quickly realized that he was unqualified. He left after six months, but, before leaving, he had lunch with Donaldson. “I’m sorry I didn’t make more of a contribution,” Schwarzman recalls saying. “If you don’t mind my asking, why did you hire me and waste your money?”

“It’s simple,” Donaldson replied. “One day you’ll be the head of this firm.”

“You must be kidding. Why?”

“It’s my instinct. You have something special and I want to bet on it.”

(Donaldson says that he has no recollection of such an incident, but he does recall telling Schwarzman that if he returned to the firm he would do well.)

Being at Lehman worked to his advantage. As one former Lehman banker describes the firm, “It was survival of the fittest. You produced the business and then you fought over the proceeds. It was every man for himself.” Bruce Wasserstein, then at First Boston, and soon to be regarded as the leading mergers-and-acquisitions banker on Wall Street, said to Eric Gleacher, the head of M. & A. at Lehman, and Schwarzman, “I don’t understand why all of you at Lehman Brothers hate each other. I get along with both of you.” To which Schwarzman replied, “If you were at Lehman Brothers, we’d hate you, too.”

Finally, Schwarzman in nutshell:

“I’m very happy with my life as it is,” his father explained as Schwarzman kept badgering him. “I’ve got enough money to send you and your brothers to college. We’ve got a nice house and two cars. I don’t want any more in life.” Schwarzman found this incomprehensible.

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