Stephen Schwarzman: Career, Lessons and Investing Tips

Stephen Schwarzman, founder of Blackstone, has had an illustrious career. His drive to succeed began at a young age when he worked in the family business and later started his own lawn mowing business. Schwarzman emphasized the importance of surrounding yourself with smart people and creating a system to generate data. He recalls successful investments like buying Hilton, but also bitter lessons from the failed steel business.

Blackstone's 77-year-old founder and CEO grew up in suburban Philadelphia. At the age of ten he was already helping in his father's clothing store, and at the age of 14 he started his own lawn mowing business. His drive to succeed started early. In his book “What It Takes”, he asked his father to expand the successful clothing store across the country, but his father refused.

Educated at Yale University, Schwarzman made up for his father's lack of ambition. Founded in 1985, Blackstone is now the world's largest alternative asset manager with over $1 trillion in assets. Forbes estimates Schwarzman's net worth at $39 billion.

He started his career in private equity and later moved to Blackstone. The company started as a traditional leveraged buyout firm, but evolved into a buy-and-build strategy firm. Schwarzman emphasizes the importance of surrounding yourself with smart people and creating a system that generates enormous privacy data. He advocates patience and emphasizes that investment decisions should only be taken when there is great confidence in success.

He cites the 2007 acquisition of Hilton as a successful investment, although it seemed expensive at the time of purchase. A disappointing investment was Edcomb Steel, in which Blackstone lost 100% of their original investment. This experience led to a change in the decision-making process in the organization.

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Schwarzman emphasizes the importance of understanding the macro environment in order to better appreciate the micro level. He sees opportunities in debt, real estate and private equity, especially if interest rates fall later in the year.

The geopolitical environment, regulatory concerns and political uncertainty are the biggest risks for investors. He recommends investors read Bill Knight's “What It Takes” and his own book “Shoe Talk” about Nike's founding.

Text: Sergey Khlepnikov
Photo: World Economic Forum

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