How was the Blackstone empire formed?

According to Bloomberg, Blackstone is one of the world's largest alternative asset managers, focusing on real estate, hedge funds, and private equity. Blackstone serves clients worldwide.

The group was founded in 1985 by Mr. Stephen Schwarzman and Mr. Peter Peterson with an initial capital of 400,000 USD, after the two left Lehman Brothers, according to Reuters.

Mr. Peterson served as US Secretary of Commerce from 1972-1973 and was President of the Council on Foreign Relations, a New York-based policy institute, until 2007. He died in 2018.

Blackstone headquarters in New York, USA

Blackstone operates primarily in the following areas:

Alternative Asset Management: Blackstone claims to be the world's largest alternative asset manager with over $1 trillion in assets under management.

Real estate investments: The group has one of the world's largest real estate funds, investing in commercial, residential and real estate development assets. The value of Blackstone's global real estate portfolio as of June 30 was $603 billion.

Private equity firm: Blackstone invests in companies through buyouts, often looking to improve performance and then resell them at a profit. As of the end of June, Blackstone had $145 billion in private equity under management in 82 companies and had $37 billion in capital available to invest.

Other financial services include financial advice, investment fund management and other financial products.

In 2007, Blackstone launched its initial public offering (IPO), raising more than $4 billion, the largest IPO in the U.S. in five years at the time, according to Reuters. Blackstone was also the first major U.S. private equity firm to go public.

When Blackstone was first starting out and had little experience in the private equity industry, investors were hesitant to invest in the company. Mr. Schwarzman and Mr. Peterson then advised on mergers and acquisitions to build confidence. One notable success was when Blackstone advised CBS Corp. on the sale of its CBS Records subsidiary to Sony in 1988, according to Investopedia .

Blackstone's business model

Blackstone attracts capital from investors, including pension funds, investment funds, financial institutions, and high-net-worth individuals. They typically commit to investing a specific amount of money in Blackstone's funds.

Using the capital raised, Blackstone invests in alternative asset classes such as real estate, private equity, hedge funds, and others. They look for investment opportunities with high potential returns.

Blackstone not only invests, but also actively manages these assets to optimize performance. This can include real estate renovations, changes to the operating strategies of private companies, or restructuring investment funds.

After investing and managing the assets, Blackstone profits through selling the assets at a higher price, receiving dividends, or from the profits of the companies in its portfolio, according to Work Theater .

The profits from the investments will be distributed to investors according to the committed ratio, after deducting management fees and other expenses.

Since its founding, Blackstone has raised more than $100 billion across its eight private equity funds alone, according to Investopedia . The company’s latest fund, Blackstone Capital Partners VIII, raised $26 billion in 2019.

Investopedia quoted Mr. Schwarzman in a speech at Yale University saying that his private equity funds achieved an average annual return of 23% from 1988 to 2008.

Since launching the firm’s first private equity fund in 1988, Mr. Schwarzman has significantly expanded Blackstone’s business segments. The firm continues to advise on mergers and acquisitions and manage private equity funds. In addition, Blackstone manages several hedge funds and has real estate investment partnerships. In 2012, Mr. Schwarzman’s real estate team began buying single-family homes across the United States in hopes of turning them into rental properties.

Billionaire Stephen Schwarzman, Chairman of Blackstone

Aiming for Asia

In an interview with Bloomberg last week, Amit Dixit, Blackstone’s head of private equity in Asia, said the group sees Asia as “the engine of growth” and said the group has been active in India, Japan, Australia and Southeast Asia.

“We see a lot of bright spots. We have local teams that are well-versed in each market,” said Mr. Dixit.

Blackstone's current chairman, Stephen Schwarzman, was once dubbed the king of private equity by Forbes magazine.

Mr. Stephen Schwarzman is one of the richest people in America and the world, currently ranked 34th on Forbes ' billionaire list with a net worth of 38.8 billion USD.

Schwarzman and his team are responsible for overseeing capital allocation for a number of pension funds, sovereign wealth funds, central banks and other institutional investors.

With global business interests in private equity, debt financing, hedge fund management and real estate acquisitions, Mr. Schwarzman is one of the most powerful people on Wall Street. He was named one of Time magazine's most influential people in 2007. In addition, Mr. Schwarzman has donated large sums of money to various charitable causes over the years.

During his recent working trip to the US, General Secretary andPresident To Lam received a number of businesses in the technology sector as well as leading investment funds from the US and the world, including the Blackstone investment fund, according to VNA.

Receiving Mr. Stephen Schwarzman, Chairman, CEO and Founder of Blackstone Investment Fund, the General Secretary and President emphasized that science, technology and innovation have been identified by Vietnam as important growth drivers for the new period and therefore hoped that Blackstone would expand its investment in Vietnam in this field to connect and provide capital for technology enterprises and startups in Vietnam.

Pointing out that green growth and sustainable development are important pillars in Vietnam's development orientation in the current period, the General Secretary and President affirmed that Vietnam identifies foreign investors as having a major role in implementing the above goals, and expressed hope that Blackstone, with its network of partners and customers with influence and capacity in this field, will support Vietnam in accessing preferential credit financial sources, serving as a bridge to bring foreign investors to Vietnam to invest in green and sustainable development fields.

The General Secretary and President highly appreciated Blackstone’s plan to invest in developing energy conversion projects in Vietnam; suggested that the group discuss and coordinate with the Ministry of Industry and Trade and relevant agencies and partners to implement investment activities in this field.

Mr. Stephen Schwarzman expressed his desire to expand investment in Vietnam. On this occasion, he said that Blackstone has joined the AI ​​data center race, an area that Vietnam has a strategy to develop.

The Party and State are committed to supporting and creating all favorable conditions for American investors in general and Blackstone in particular to deploy effective and sustainable business investment activities in Vietnam.

Source: https://thanhnien.vn/de-che-blackstone-duoc-hinh-thanh-nhu-the-nao-185240926130324902.htm