Schwarzman, who co-founded Blackstone with Peterson in 1985, was looking to raise money for his firm’s first investment fund and had set an ambitious target of a billion dollars.
It was the spring of 1987 and Stephen Schwarzman, co-founder of Blackstone, was looking forward to a fruitful meeting with the endowment team of an Ivy League college. At quarter-to-three, when the then 40-year old Schwarzman, along with his business partner Pete Peterson, reached the doors of the endowment office, he was not ready for a surprise.
“We had got an appointment for 3:00 on a Friday afternoon. We got there at quarter-to-three and kept knocking on the door,” Schwarzman told FE during a lunch meeting. A passing janitor saw the men knocking and told them it was Friday and that the people they were looking for had already left.
Schwarzman, who co-founded Blackstone with Peterson in 1985, was looking to raise money for his firm’s first investment fund and had set an ambitious target of a billion dollars. His competitors must have scoffed at the thought but Schwarzman went by the philosophy that it was just as hard to achieve big goals as it is small ones. However, as rejections mounted, he began to panic, he says.
“Those were terrible moments for an entrepreneur,” recalls Schwarzman, who recently released his book—”What It Takes-Lessons in the Pursuit of Excellence”. That spring day in 1987 soon turned into a nightmare as it started pouring. Unable to find a taxi, a drenched Schwarzman began banging on the back windows of occupied taxis, holding up a $20-bill in order to bribe the passenger to let them in. The trick finally worked when he raised his offer to $30. “It was the closest to a deal I had gotten in weeks,” he writes in his book.
“What It Takes” is an account of Schwarzman’s experiences that is eloquently put together to demonstrate “how to build, transform, and lead thriving organisations.” However, what stands out in the book are the human facets of a larger-than-life personality. Schwarzman’s hunger for adventure took him to places that otherwise would have been shunned by a future Wall Street executive. At a time when his classmates at Yale were busy playing tennis, he was sweating it out in an engine room of a ship and “dodging blows in Colombian bars”. Schwarzman also takes his own time to explain his newly acquired stardom at Yale where he formed the Davenport Ballet Society, and managed to bring together ballet-loving men from Yale and women from different colleges for the dress rehearsal of The Nutcracker and becoming in the process what he says “a student ballet impresario”.
During Wednesday’s conversation, Schwarzman is quick to word his thoughts on every issue, be it the ongoing Coronavirus issue or the surprise Fed rate cut. “I shouldn’t be this provocative but I don’t understand how interest rate cuts cures you of the Coronavirus,” he says.
On being asked about the impact of the Coronavirus, Schwarzman says it will have a significant negative impact on global growth. “The question is how long that will continue and it does not appear that there is a short-term cure for sure. Almost all the experts that we consult said it should be somewhere between a year and year-and-a-quarter to develop the vaccine,” he says.
The man who has rubbed shoulders with world leaders, academics, business honchos makes no bones of the fact that at one point in time, fund-raising was a nightmare despite his Wall Street credentials. He also makes it a point to detail his mistakes—describing his decision to invest in a company that bought raw steel and converted it into products for auto and airline manufacturers. Schwarzman had two partners debating on the issue. One of them, who had extensive experience working on various deals of the company in question in his previous role at another organisation, was pitching for the investment into the steel products manufacturer. However, the other partner had reservations about the company. At the end, Schwarzman decided to go with the investment. It turned out that it was a bad decision. Post this incident, Schwarzman writes, that Blackstone developed a unified approach to investing where everyone is involved and share responsibilities in the decisions made.
When this correspondent finally asked Schwarzman what he thought of the executives at the endowment who decided to call it a day before the scheduled meeting on that spring day, his bluish-green eyes do not defy any emotions. “If I weren’t in public, I would have told you what I wanted. If you were to find out who they are— and you look like you are of sufficient size— you could take care of them,” he says.