[Marxism] 45 percent of world's wealth destroyed: Blackstone CEO
lnp3 at panix.com
Wed Mar 11 09:00:50 MDT 2009
Steve Palmer wrote:
> 45 percent of world's wealth destroyed: Blackstone CEO
> Tue Mar 10, 2009 3:42pm EDT
> By Megan Davies and Walden Siew
> NEW YORK (Reuters) - Private equity company Blackstone Group LP (BX.N) CEO Stephen Schwarzman said on Tuesday that up to 45 percent of the world's wealth has been destroyed by the global credit crisis.
> "Between 40 and 45 percent of the world's wealth has been destroyed in little less than a year and a half," Schwarzman told an audience at the Japan Society. "This is absolutely unprecedented in our lifetime."
It would be nice if 99 percent of Schwarzman's wealth had been wiped out.
The Guardian (London) - Final Edition
June 15, 2007 Friday
The Guardian profile Stephen Schwarzman: An expert in branding himself,
he has gone from being a very rich nonentity to being the poster child
for capitalist success: Fabulously wealthy private equity boss is New
Yorks man of the moment
BYLINE: Andrew Clark, New York
After a tough day of deal-making, it is only right that the king of Wall
Street should retire home to a palace. Stephen Schwarzman does just that
- his Manhattan apartment boasts 35 rooms including a foyer the size of
a ballroom, his-and-hers saunas, a pine-panelled library, 11 fireplaces
and 13 bathrooms.
Works by Claude Monet and the American abstract artist Cy Twombly adorn
the walls of the two-floor, 20,000 square foot Park Avenue residence. In
pride of place, according to visitors, is a silver-framed photograph of
Schwarzman arm in arm with President Bush.
Brash, well-connected and fabulously wealthy, Schwarzman, 60, is New
York's man of the moment. The Pennsylvania-born boss of the Blackstone
private equity empire has been at the forefront of a rush of
multibillion-dollar deals to snatch public companies away from the
prying eyes of the stock market.
Blackstone's investments have included $12.7bn (£6.4bn) for the market
research firm Nielsen, $3.2bn for United Biscuits, $2.3bn for Orangina
and $3.6bn for Merlin Entertainment - the owner of Madame Tussauds,
Alton Towers and the London Eye. In November, the firm smashed records
by paying $38bn for US property firm Equity Office Properties.
The son of a curtain store owner, Schwarzman is not blessed with deep
reserves of patience, and to describe him as competitive would be a
reckless understatement. "I want war, not a series of skirmishes," he
told one interviewer this week. "I always think about what will kill off
the other bidder."
The business channel CNBC has dubbed him the premier capitalist in
America. In a March cover story, Fortune magazine crowned him as Wall
This week, Blackstone was compelled to disclose the extent of his riches
in a prospectus for a stock market flotation, and revealed that
Schwarzman took home $398m in cash last year. When the firm goes public,
he will scoop at least $449m and his ongoing 23% stake in the business
will be worth $7.7bn.
Blackstone points out that these sums reflect the fact that Schwarzman
invested his own money to start the firm in 1985. But to some, he has
become a poster boy for financial excess.
Richard Ferlauto, director of investment policy at the American
Federation of State, County and Municipal Employees, says Schwarzman
benefits from favourable tax breaks and is setting a benchmark bound to
drag up boardroom pay elsewhere: "How much incentive does he need, given
his direct ownership of the company, to get him to produce more for his
Another union, the SEIU, is more measured. It says private equity has an
opportunity to shape companies in a beneficial way for both workers and
employers. But spokesman Andy McDonald adds: "Right now, the econo my's
doing very, very well for a small number of people but there's a much
larger group for whom wages are stagnant and healthcare is hard to come by."
By definition, private equity is low-profile. Its logic is to take
companies with long-term challenges out of the public gaze and to
restructure them without day-to-day scrutiny from investors.
Blackstone's rivals - KKR, Texas Pacific and Carlyle Group - shun the
limelight. Schwarzman, though, is different. Short, grey-haired and
softly-spoken, he is renowned for his exotic parties. His Christmas
event was themed on 007, with Bond girls sashaying around with trays of
nibbles. Then in February, he spent an estimated $3m on a birthday bash
featuring private performances by Rod Stewart and Patti LaBelle at a
regimental armoury on Manhattan's upper east side. The venue was
decorated to look like Schwarzman's own living room, complete with a
huge portrait of the host himself. Guests included Colin Powell, Donald
Trump and mayor Michael Bloomberg.
Typical of Schwarzman's prestige is his choice of living space. He paid
$30m in 2000 for his apartment, which was previously the home of the
Mayflower descendant George Brewster, John D Rockefeller and computer
leasing magnate Saul Steinberg. "Each one of them, in their way, was the
ultimate capitalist of their age," says Michael Gross, author of 740
Park, a book about the building. "Not only is it the best building in
New York - but it is the best apartment in the best building."
Schwarzman is married to Christine Hearst, an intellectual property
lawyer who, unusually, has kept the name of her first husband, Austin
Hearst, grandson of the legendary newspaper tycoon Randolph Hearst.
Nomenclature is important to the couple, suggests Gross: "This is a man
who is an expert in branding himself - and he has done so brilliantly.
He's gone from being a very rich nonentity to being the poster child for
capitalist success. Stephen Schwarzman is now know as the epitome of
Educated at a suburban Philadelphia school, Schwarzman attended Yale
University at the same time as George W Bush and both were members of
the elite Skull and Bones society. He worked at the investment bank
Lehman Brothers before quitting to set up Blackstone with a colleague,
Peter Peterson. The firm is a play on their names - "schwarz" is the
German for black and "Peter" is derived from the Greek word petrus,
Schwarzman remains close to President Bush, who attended a Republican
fundraiser at the private equity tycoon's apartment in April. Some say
he covets the job of treasury secretary. If he ever gets it, America's
treasury mandarins should expect to be pushed hard - Schwarzman boasts
that he requires nothing less than a "zero-defect culture" in all his
Born February 14 1947
Family Married to Christine Hearst, a lawyer. Three children between
them from previous marriages
Education BA from Yale; MBA from Harvard business school
Employment Began at Lehman Brothers; managing director by 31. Left 1985
to co-found Blackstone
Interests Chairman, Kennedy Centre for Performing Arts; board of New
York Public Library; member Council on Foreign Relations thinktank
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