Blackstone Redefines Management Structure for Future Growth
New York, December 17, 2004: The Blackstone Group, the world’s largest alternative asset manager with approximately $32 billion of capital raised since inception, today announced several changes in senior management responsibilities to facilitate the firm’s growth goals and to provide for orderly succession planning.
These changes include the announcement that Stephen A. Schwarzman, 57, a co-founder of the firm, will become Chairman and Chief Executive Officer of The Blackstone Group. Schwarzman, who has served as CEO of the firm since its inception nineteen years ago, is turning over his former role as President to Hamilton “Tony” James, 53, who previously held the post of Vice-Chairman. Peter G. Peterson, 78, also a co-founder and previously Chairman of the firm, has been named to the newly created post of Senior Chairman. These changes will become effective January 1, 2005.
Since Tony James joined Blackstone from CSFB in 2002, the growth of the firm has accelerated. For the past two years the rate of investment has been around $4.6 billion a year across the firm’s three core alternative asset investment areas, private equity, real estate and corporate debt, and returns are among the highest in the industry. In addition, the hedge fund of funds business now has approximately $9 billion under management. The corporate advisory group has hired a number of top-level bankers in the past two years and been awarded many new mandates, while the restructuring group continues to be a world leader in its area. The firm has also introduced a new range of collateralized debt vehicles which now have around $2.5 billion under management. Today, the portfolio companies in which Blackstone’s private equity group has equity participation have combined revenues in excess of $55 billion and some 350,000 employees. The firm’s most recent private equity fund which closed in 2002 at $6.45 billion is still the largest such fund in the world.
According to Stephen A. Schwarzman; “The extraordinary growth of the past few years, not only in assets under management but also in the range of alternative investments that the firm makes available to its investors, has led Pete and me to address long-term management planning issues. There is a need to realign our senior management to maintain the success of the firm as it continues to grow and develop.” He added; “I will continue to be fully engaged in the day-today role of overseeing the firm’s full range of businesses and its investment processes, a role in which I have served for the past nineteen years. When we selected Tony James to join us two years ago, we had, of course, had very high hopes. He has exceeded our highest expectations. Tony James’ expanded role will allow more time for me to explore growth and development opportunities for the firm as a whole, and seek out new opportunities for our highly sophisticated institutional investor base. I am, of course, delighted that Pete Peterson will remain active.” Tony James, commented; “I could not have anticipated how much I would enjoy my first two years at Blackstone with its unique global franchise in the alternative asset and corporate advisory businesses. I look forward to continue helping to manage and grow these businesses and attract new talent to the firm.”
Peter G. Peterson will continue to provide the firm with his unique perspective on business and the domestic and global economy, while continuing in his outside roles as Chairman of the Council on Foreign Relations, Chairman of the Institute for International Economics and President of The Concorde Coalition, among others. Peterson said, “When Steve and I set up the firm in 1985, we not only wanted to build a first class merchant banking firm, but wanted to develop an in-depth organization that could continue to prosper in the indefinite future. I strongly believe we have such a team now, including Tom Hill, Vice Chairman, who has been responsible for building our thriving liquid alternative asset management business, Mark Gallogly and John Kukral, who supervise our very successful private equity and real estate businesses respectively, Art Newman, who has led our successful efforts in the restructuring advisory business and Howard Gellis, who has built our strong mezzanine business. Given the depth of that team and Tony James’ extraordinary performance, I was pleased to pass on my Chairman’s title to Steve, because I believe that all this is very good news for our clients and investors, our employees and, of course, for Blackstone.”
The Management Committee of the firm will remain unchanged with J. Tomilson Hill, Mark Gallogly, and Michael Puglisi joining Messrs Peterson, Schwarzman and James.