You are unlikely to ever find out what it feels like to amass $126 billion.
Is it like receiving an unexpected gift? The first bite of ice cream? Being deliriously drunk?
One of the few people who can speak to this experience today revealed what it’s like to acquire a sum of money roughly the size of Ukraine’s annual GDP. In an interview with Bloomberg, Stephen Schwarzman, CEO of Blackstone, the world’s largest private equity firm, said it’s quite something.
In the first quarter of 2019, Blackstone raised $43 billion, bringing its inflows over the previous 12 month to a total of $126 billion. This “remarkable money gathering,” Schwarzman said, was “like an out-of-body experience.” So, maybe, it’s more like seeing manna floating down from heaven, or stumbling into a magic money tree in full bloom.
At the end of March, Blackstone’s total assets crossed the half-a-trillion threshold, to $512 billion. (Put another way, that’s five years of Ecuador’s annual economic output, or about one of Thailand’s.) Blackstone’s steady growth in assets under management mirrors the broader bonanza in private capital fundraising, with 2019 currently on course to break post-recession records. Blackstone is in the midst of raising what is set to be the biggest buyout fund in history, eclipsing Apollo’s $24.7 billion fund which closed in 2017.
The firm also announced today that it would convert from a partnership to a corporation. Schwarzman told investors in a conference call that Blackstone’s current structure “simply makes the stock too difficult to own.” Partnership status allows it to escape certain tax liabilities, but introduces complexities for mutual fund managers who want to buy Blackstone’s stock on behalf of retail investors. (Rival firm KKR converted from a partnership to a corporation last year.) At the time of writing, Blackstone’s shares were up by around 8% on the day.
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