The New King of Wall Street
“You don’t understand what drives him. Money is the measuring stick.”
– Arline Schwarzman (subscription required), Mother of Steve Schwarzman, on the subject of Blackstone’s IPO
A few months ago Fortune ran a magazine cover with the picture of Steve Schwarzman, Head of The Blackstone Group, with the title: “The New King of Wall Street”. And now, as Blackstone prepares to go public, Wall Street is a chattering over the man of the moment, Steve Schwarzman, the face of private equity.
In a front page profile of him on Wednesday, “How Blackstone’s Chief Became $7 Billion Man” (subscription required), The Wall Street Journal described his recent 60th birthday bash this way:
The Armory’s entrance hung with banners painted to replicate Mr. Schwarzman’s sprawling Park Avenue apartment. A brass band and children clad in military uniforms ushered in guests. A huge portrait of Mr. Schwarzman, which usually hangs in his living room, was shipped in for the occasion.
The affair was emceed by comedian Martin Short. Rod Steware performed. Composer Marvin Hamlisch did a number from ‘A Chorus Line’. Singer Patti Labelle led the Abyssinian Baptist Church choir in a tune about Mr. Schwarzman. Attendees included Colin Powell and New York Mayor Michael Bloomberg. The menu included lobster, baked Alaska and a 2004 Louis Jadot Chassagne Montrachet, among other fine wines.
Last year, Blackstone made almost $2.3 billion on top of $1.3 billion in 2005 and $1.5 billion in 2004 (SEC Registration Statement). The plan (subscription required) is to sell 133.3 million shares to the public – representing a 10% interest – for between $29 and $31 each. That works out to around $4 billion for 10% valuing the firm at $40 billion. (The Chinese goverment also bought a 10% stake for $4 billion).
Schwarzman stands to sell $677 million worth of shares and retain a stake valued at about $7.5 billion.
It’s not something I want to get involved in (see my “The Irony of a Blackstone IPO”). But it should be entertaining!