If power brokers who profited from junk bonds ruled Wall Street in the 1980s, private equity funds lead the show now. Private equity firms invest astronomical amounts to buy out companies across borders and industry sectors, restructure them and sell them on. Blackstone is the world’s biggest private equity firm.
As of April, Blackstone had US$100 billion under management. The firm owes its number one position to its CEO’s tenacity; He hates to lose.
“Lunch? You must be kidding!” he says. “We don’t have time for lunch.” He is like a bulldozer when he works. He never gives up. A prime example is when Blackstone acquired German chemical company Celanese AG in 2004. Celanese took its time to raise its price. Schwarzman waited. Blackstone eventually resold it at a six-fold profit.
Schwarzman caused a ruckus recently by comparing President Obama to Hitler. When the administration announced that it would increase taxes on private equity firms, he compared it to “when Hitler invaded Poland in 1939.” It remains to be seen whether his latest war will be a winning one.
By Ha Im-sook
artemes@donga.com