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Business Leader of the Week: Meet Stephen Schwarzman, founder of Blackstone Group

IFM_Stephen Schwarzman
Stephen Schwarzman's first job in financial services was with Donaldson, Lufkin & Jenrette, an investment bank that merged with now-defunct Credit Suisse in 2000

United States-based Blackstone Group is among the biggest alternative asset managers in the world. Established in 1985, the venture has developed into a significant force in the real estate, credit, hedge fund solutions, and private equity industries.

Blackstone offers its clients a diverse range of investment strategies, while operating through multiple segments, including credit, real estate, hedge fund solutions, and private equity.

Blackstone has made a name for itself in the private equity space by managing and acquiring businesses in a range of sectors. The ability of the company to drive value creation within its portfolio companies by utilising its operational expertise and strategic insights is what makes it an expert in this field.

In the real estate sector, Blackstone has accumulated a sizable portfolio of properties across the globe, consisting of residential complexes, office buildings, hotels, and industrial spaces. Capitalising on opportunities in both established and emerging markets, the firm handles asset management, development projects, and property acquisitions through its real estate arm.

Institutional investors seeking diversified exposure to alternative investments are served by Blackstone’s hedge fund solutions segment, which includes fund-of-funds, customised portfolios, and advisory services. With the use of sophisticated investment strategies, the company’s hedge fund offerings are intended to reduce downside risk and provide investors with attractive risk-adjusted returns.

Furthermore, Blackstone’s credit division is concentrated on making investments in a range of credit-related instruments, such as direct lending, mezzanine financing, and distressed debt. This segment pursues opportunistic investments in global credit markets while offering flexible capital solutions to businesses looking for financing options.

The ability of Blackstone to recognise and seize investment opportunities in a variety of asset classes and market conditions is ultimately what drives the company’s success. Blackstone is still a major player in influencing the global alternative investment market because of its proven track record of providing investors with substantial returns and its dedication to excellence in investment management.

The brain behind this successful venture is 76-year-old Stephen A. Schwarzman, chairman and CEO of the Blackstone Group.

    Who Is Stephen Schwarzman?

  • Stephen Schwarzman was raised in a Jewish family in Huntingdon Valley, Pennsylvania
  • He attended the Abington School District in suburban Philadelphia and graduated from Abington Senior High School in 1965
  • Stephen Schwarzman briefly served in the US Army Reserve before attending Harvard Business School, where he graduated in 1972
  • His first business was a lawn-mowing operation when he was 14 years old, employing his younger twin brothers, Mark and Warren
  • Stephen Schwarzman’s first job in financial services was with Donaldson, Lufkin & Jenrette, an investment bank that merged with now-defunct Credit Suisse in 2000
  • He worked at the investment bank Lehman Brothers, became a managing director at age 31, and then head of global mergers and acquisitions
  • Stephen Schwarzman was listed as a member of the international advisory board of the Russian Direct Investment Fund in September 2011
  • According to the Bloomberg Billionaires Index, he had a net worth of $32 billion as of October 2022
  • Stephen Schwarzman was named one of Bloomberg’s 50 Most Influential People of the Year in 2014 and 2016
  • He and his wife Christine gave USD 25 million to the Animal Medical Centre of New York in New York City in 2021

Blackstone to bid for L’Occitane

According to Bloomberg News, the private equity firm has been investigating possible acquisition offers for L’Occitane and has completed preliminary due diligence. Blackstone is thinking about collaborating on a buyout with Reinold Geiger, the billionaire chairman of L’Occitane.

In Hong Kong trading, L’Occitane’s shares increased by 0.8%, valuing the company at approximately HK$38.4 billion (USD 42.9 billion). Geiger thought about going private with the company in 2023, hoping to relist it in Europe at a higher price. Ultimately, he gave up on the concept, which caused L’Occitane stock to plummet.

Over 70% of L’Occitane is owned by an investment vehicle that Geiger ultimately controls, according to exchange filings. There is no guarantee that the current discussions will result in a proposal. L’Occitane might draw interest from other suitors, Bloomberg stated further.

The year 2010 saw the Luxembourg-based company going public on the Hong Kong stock exchange. The stock has since declined, reaching a peak in 2022 at a price more than double that of its IPO.

L’Occitane’s enterprise value was approximately 10 times its estimated earnings before interest, tax, depreciation, and amortisation, compared to peers that trade at an average of more than 13 times.

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