Steve Schwarzman , the billionaire co-founder of Blackstone Group (NYSE: BX), said Thursday on CNBC that he gets a "real chuckle" about the confusion between his private equity firm's name and Larry Fink 's BlackRock.
During an interview on "Squawk Box," Schwarzman told the behind-the-scenes story about the similar names, saying Fink and he decided decades ago to do it on purpose.
The business that would become BlackRock (NYSE: BLK) started under the umbrella of Schwarzman's firm in 1988. "They used to be called Blackstone Financial," Schwarzman said. "We started in business together. We put up the initial capital." Schwarzman started Blackstone three years earlier in 1985.
When Fink decided to branch out on his own, he needed a new name for his asset management operation, Schwarzman said. "Larry and I were sitting down and he said, 'What do you think sort of about having a family name with "black" in it.'"
Schwarzman said he told Fink it was a "good idea," despite outside advisor warnings to both of them to "make sure you don't have a name that's similar" because "it will completely confuse people."
Schwarzman recalled how Fink suggested as a new name for his business "'either BlackPebble or BlackRock,'" saying, "'You know if we do something like this, all of our people will kill us."
Fink was also concerned that if one of the businesses was successful and the other wasn't it would hurt the laggard, Schwarzman added. "I said, 'I'm not worried about you being successful. I think you're remarkable.' I think they were a little bit more concerned that we'd be successful."
BlackRock was eventually chosen. "There is a little confusion. And every time that happens I get a real chuckle," Schwarzman said.
Imagine BlackRock, which grew into the world's biggest money manager with $5.4 trillion of assets under management, being called "BlackPebble?" BlackRock has far surpassed Blackstone in assets under management. But Schwarzman's firm still looks after $368 billion.
Watch: "A Billionaire's Bet: The Best and the Brightest," on CNBC on Sunday at 10 p.m. ET/PT about the Schwarzman Scholars program in Beijing aimed at grooming future leaders.
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