General partners leading the way
The Blackstone Group (BX) was co-founded by its current chairman and CEO, Stephen Schwarzman. He’s at the forefront of the company’s decision making and involved in all stages of the firm’s development.
Blackstone has more than 130 senior managing directors and 840 other investment and advisory professionals employed across 23 countries, raising and managing the funds across various investment offerings.
Stephen Schwarzman and other senior managing directors have focused on developing the global offices, building the company’s network of professionals, and hiring industry leaders to develop new strategies and capabilities.
The team effectively managed the company following the financial crisis by taking advantage of dislocation in the equity and debt markets. This has allowed the company to innovate and expand its operations.
Management has diversified its product offerings by strengthening the real estate, credit, and hedge funds solution segments. This makes the company less reliant on its private equity business. It also gives the edge to Blackstone over other alternative asset managers like Carlyle Group (CG), KKR & Co. (KKR), Apollo Global Management (APO), and other asset managers with less diversified products offerings. Only a small number of asset managers are a part of the Financial Select Sector SPDR Fund (XLF).
Control of the operations
Management’s commitment to a diversification strategy is demonstrated by the fact that it has raised more than $120 billion in assets under management to commit to strategies that didn’t existed in 2007.
Management also has strong control over the company’s operations through the partnership structure. Management and other employees own approximately 45% of the firm’s units and control over 50% of voting power. With their own investments at stake, the general partners are incentivized to work for the unitholder’s interest.