“David Carey and John Morris tell the tale of Blackstone and the world of private-equity with verve and perceptive insight.” —Steve Forbes, Editor-in-Chief, Forbes Magazine
In a new book, The Deal’s David Carey and Dow Jones’ John Morris take us behind the scenes of a financial revolution and share the untold success story of Steve Schwarzman and Blackstone.
KING OF CAPITAL
The Remarkable Rise, Fall, and Rise Again of
Steve Schwarzman and Blackstone
By David Carey and John E. Morris
The Blackstone Group was little known outside Wall Street until two events in 2007 catapulted it onto the public stage: the lavish sixtieth birthday party of its CEO Steve Schwarzman and the firm’s IPO a few months later. They advertised to the broader world what Wall Street had long known—that Blackstone had eclipsed better known private equity firms such as KKR and the Carlyle Group, both in size and profits. By then Blackstone owned all or part of fifty-one companies which together employed 500,000 people and raked in $171 million a year in revenue. Yet little has been written about this financial colossus.
In KING OF CAPITAL: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone (Crown Business; October 2010), veteran financial reporters David Carey and John E. Morris tell the inside story of how Schwarzman and his co-founder Pete Peterson, starting with just one secretary in 1985, built a financial powerhouse over the next two decades that weathered the crisis of 2008-09 successfully even as other institutions crumbled.
King of Capital is the unauthorized tale of how Blackstone and a small coterie of competitors wrested control of corporations around the globe, and emerged as major forces on Wall Street, challenging the likes of Goldman Sachs and Morgan Stanley. A narrative in the vein of bestsellers such as The Last Tycoons and Greed and Glory on Wall Street, the book recounts Blackstone’s evolution through fits and starts, disastrous early investments and internal clashes. It not only reveals the personalities behind the firm but also the larger forces at work in the corporate and financial worlds that transformed private equity from a handful of upstart investment boutiques in the 1970s and 1980s into a mainstay of the financial world, backed by billions from public pension funds and other institutional investors.
Today, Carey and Morris write, Schwarzman and his counterparts represent a new breed of capitalist, a cross between the great bankers and corporate chieftains. Like banks, their firms provide capital, but unlike banks, they take control of their companies. Like sprawling global corporations, their businesses are diverse. But unlike corporations, their portfolios of businesses change year to year. Moreover, because they buy companies and sell them a few years later, they exert an outsized influence on the economy and the markets.
This contrarian book challenges the conventional wisdom that private equity firms are “strippers and flippers” that loot companies of their best assets and leave them hobbled. It argues instead that private equity provides crucial capital and a unique form of ownership that often allows companies to undertake necessary changes. With nearly $30 billion of capital at Blackstone’s disposal, Carey and Morris predict that the firm is poised to regain a leading role in the corporate world as the economy recovers.
Carey and Morris take us behind the scenes of a financial revolution in King of Capital, examining:
? How Blackstone formed the money manager BlackRock—which now manages more than $3 trillion in assets—and then lost it in a dispute over money.
? The crisis Blackstone faced a decade ago after an exodus of seasoned partners left its upper ranks alarmingly thin.
? How the egotistical Schwarzman proved nonetheless to be a shrewd entrepreneur, hired others with personalities as big as his own and recruited a star from the outside as his successor.
? The internal debates about whether to take the company public in 2007 in the face of fierce political opposition in Washington, D.C.
? The key investments that established Blackstone’s reputation and earned it billions in profits—and the misguided deals that cost it hundreds of millions.
? How Blackstone and other private-equity firms have defied their image as gamblers and “barbarians at the gate” and proved to be much more prudent during the boom years than other financial institutions such as Citigroup, Lehman Brothers, and Merrill Lynch. And how a corporate culture born of Schwarzman’s innate cautiousness spared Blackstone some of the losses rivals suffered.
For more information, please visit: www.king-of-capital.com.
DAVID CAREY is senior writer for The Deal, a news service and magazine covering private equity and mergers and acquisitions. Before joining The Deal, he was the editor of Corporate Finance magazine and wrote for Adweek, Fortune, Institutional Investor, and Financial World. Carey has also appeared often on CNBC.
JOHN E. MORRIS, now an editor with Dow Jones Investment Banker, was for many years an assistant managing editor at The Deal in New York and London and before that was an editor and writer at The American Lawyer magazine. He has made frequent appearances on CNBC and the BBC.
KING OF CAPITAL By David Carey and John E. Morris
On-sale: October 5, 2010; Hardcover; 336 pages; ISBN: 978-0-307-45299-3; Price: $27.50
For more information, or to schedule an interview with one or both authors,
please contact Dennelle Catlett at 212-782-9486 / firstname.lastname@example.org.