Last month, Blackstone co-founder Stephen Schwarzman was given the Charlie Rose treatment. Rose is known to America because of The Charlie Rose Show, a high-brow, public television interview programme. Rose interviewed Schwarzman as part of a series of discussions aired from Harvard Business School, the Blackstone CEO's alma mater. Below are excerpts from the conversation, which highlight Rose's often needling interview style and Schwarzman's gift for making complicated matters sound easy:
Stephen Schwarzman: What we do is pretty simple. We raise large amounts of money from, principally, institutions – pension funds, endowments. And then we buy companies using those funds. And we basically borrow about $3, sometimes a little more, sometimes a little less, to every $1 of equity that we put up in the deal. We tend to control the deals, we try and improve the companies. And we own them for a while, and then we sell them, and hopefully make a lot of money for our investors. That is what we do.
Schwarzman: Well, I don't know about snatching.
Schwarzman: We don't do much snatching. We compete but we don't snatch. But part of what is interesting is that besides the individual deals you are talking about, we are building our own firm, Blackstone. So that's quite interesting as well. I get to be sort of a manager and a strategist…
Schwarzman: Jeez. Well, I guess everybody's got a good story in life. We could come up with at least one. And I guess the best was really one of our first. It was buying a company that we renamed Transtar, which were a bunch of railroads and barge lines owned by United States Steel Company that we bought when they were having a strike. And it was done in the 1980s, and we leveraged it. Jeez, it must have been, I don't know, a lot. But it was eight to one. And by the time we were finished with the deal, we…
Schwarzman: And we had railroads, basically. And we made 24 times our money. So that was
Schwarzman: That was a good deal.
Schwarzman: That was a good deal.
Schwarzman: Not often, no.
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