NEW YORK/LONDON (Reuters) - When Blackstone Group LP named a new global head of private equity last month, Chief Executive Stephen Schwarzman was looking for more than just a business unit chief.

Even though the buyout king has no plans to retire, the appointment of Joe Baratta, a 41-year-old dealmaker credited with building up the firm's European buyouts practice, was the latest step in a wider succession plan, Blackstone insiders said.

Baratta joins five other senior Blackstone executives from whose ranks the successor to Schwarzman, 65, will eventually emerge, the sources said. The others are Jonathan Gray, 42, real estate chief; Bennett Goodman, 54, co-founder of the credit business; Tom Hill, 63, who runs the hedge fund team; Laurence Tosi, 44, the chief financial officer; and Joan Solotar, 47, who spearheads investor relations, the sources said.

Blackstone declined to comment on succession planning and on behalf of the executives.

Blackstone's arrangements, as revealed by these sources, bring into sharper focus how and whom it will choose to lead the world's largest alternative asset management house.

They also highlight the succession issue confronting other private equity firms launched in the leveraged buyout revolution of the 1980s and 1990s, whose larger-than-life leaders are now close to or past retirement age.

Those include Henry Kravis, 68, and George Roberts, 68 at KKR & Co LP; and David Rubenstein, 63, William Conway, 63, and Daniel D' Aniello, 65, at Carlyle Group LP.

To be sure, the selection of a CEO is not as important as in the firm's early years, given the growth in headcount and resources at Blackstone, which now employs close to 1,600 professionals.

With equity and bond markets uncertain and many of the world's major pension funds underfunded, investors are more concerned about solid returns than an affable personality in the firm's leader.

"We pay out about $64 million every month to over 35,000 retirees," said George Hopkins, an executive director of the Arkansas Teachers Retirement System, a Blackstone investor, when asked about the succession.

"We are not interested in people who are good conversationalists and good company; we are out for people who make us money," he added.

NEVER RETIRE

The CEO of Blackstone oversees a firm whose portfolio companies have more than 700,000 people on the payroll around the world and manages money that belongs to 37 million pensioners globally, as well as sovereign wealth funds that represent the interests of hundreds of millions of citizens.

Even if Schwarzman is not at the forefront of every investment decision, he remains a prominent figure in fundraising, promoting the firm as a diversified asset manager and seeking to attract capital across its investment platforms. Blackstone's brand is inextricably tied to his name.

Schwarzman also still reviews all private equity investments and occasionally advises clients along with Blackstone's investment bankers.

Were Schwarzman to step down in the next few years, President and Chief Operating Officer Tony James, 61, would likely take the reins at the firm.

"Steve will never retire; he will die at his desk. I wouldn't necessarily conclude that Tony (James) is leaving anytime soon. He is a workaholic and he has got enormous energy," one senior Blackstone executive said.

Insiders said James is likely to retire long before Schwarzman leaves. Indeed, the appointment of Baratta in July resulted from James taking a step back from the day-to-day running of private equity as well as the firm positioning for succession, they added.

Blackstone is best known for multibillion-dollar buyouts of companies such as Hilton Hotels Corp and The Weather Channel. Yet such private equity deals account for just a quarter of assets under management.

The firm has diversified into alternative assets such as real estate, corporate credit and hedge funds and now manages over $190 billion in total for pension funds, sovereign funds and other investors. It also has an investment banking arm that generates income from fees for deal advice rather than deals themselves.

NO TEARS

Baratta's quiet, considered style as well as his investments in theme park operator Merlin Entertainments Group and UK-based holiday group Center Parcs, won him plaudits both inside and outside the firm. His appointment offers hints as to how the succession process at Blackstone could play out.

Schwarzman, who founded Blackstone in 1986 with now retired Peter Peterson, had signaled to senior dealmakers at the firm he would appoint a global head of private equity sometime between 2012 and 2013, the sources said.

Schwarzman and James spent two years monitoring individuals' performance and asking senior partners at Blackstone about who they thought should head the firm, the sources said.

"It wasn't a competition and nobody left. There were no tears or anything like that. Everybody, I think, was very supportive that Joe was the right guy," another senior Blackstone executive said.

Baratta, who was based in London for the last 11 years, is relocating to New York and will now be more involved in corporate issues facing the firm by sitting on Blackstone's management committee.

His promotion follows the appointment in February of Gray to Blackstone's board of directors in recognition of the success and popularity of the real estate fund offerings launched under his seven years of leading the business.

Real estate is by far the most profitable of Blackstone's product lines, accounting for 93 percent of its second-quarter economic net income, the figure most popularly cited by private equity firms to report earnings.

Not everyone in the group of six possible successors is tipped with the same odds.

Hill at 63 is older than James, while the 47-year-old Solotar's background as a financial analyst and head of equity research may place her behind those with more seasoned investment backgrounds.

But insiders stress that any decision on succession could still be years away and so the dynamics between Blackstone's different businesses could shift.

Private equity, seen as a relatively mature asset class, may stage a comeback, giving Baratta an edge over the much celebrated Gray. The credit business could shine in choppy capital markets, favoring Goodman.

PAY IS NOT EVERYTHING

Neither will the top job be a major financial incentive for a high-flying successor.

Schwarzman may have been paid $213.5 million in salary, share of profits and cash distributions from his holdings in Blackstone in 2011, but this was mostly the result of his 21-percent ownership of the private equity firm, something a new CEO, as a non-founder, would not be able to match.

Gray, for example, one of Schwarzman's best paid lieutenants who receives the same base annual salary as the CEO of $350,000, got $47.9 million in 2011 as a result of his ownership interests and pay. Gray's stake in Blackstone is less than a fifth that of Schwarzman's, yet such rewards are far from measly.

By comparison, Goldman Sachs Group Inc CEO Lloyd Blankfein got a $16.2 million pay package in 2011. Laurence Fink, the CEO of Blackrock Inc, the money manager with $3.6 trillion in assets that spun out of Blackstone in 1992, received total compensation in 2011 of $21.9 million.

The CEO job also comes with more public scrutiny, now that U.S. presidential candidate Mitt Romney's tenure as CEO of Bain Capital LLC has fueled debate over the industry's practices, something at least one of the candidates recognizes.

"I love the business I do and, frankly, I get a lot less notoriety than the guys who sit one floor up," the candidate said on condition of anonymity.

(Reporting by Greg Roumeliotis in New York and Simon Meads in London, additional reporting by Ilaina Jonas in New York; editing by Paritosh Bansal and Alwyn Scott; desking by G Crosse)

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These two adorable penguins visited private equity giant Blackstone's offices in New York yesterday and pooped on the carpet and a conference table, according to DealBook's Michael De La Merced.

During their visit, the pair of birds from SeaWorld also got to meet the leader of their parent company, Steve Schwarzman, and shake his hand.

Here's the photo Blackstone Tweeted: 

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Private equity giant Blackstone Group had two friendly penguin visitors from SeaWorld in their offices yesterday afternoon. 

Here's  photo of the pair of birds attending a meeting in a conference room that Blackstone Tweeted.

The penguins, who both got to shake hands with Blackstone's billionaire CEO Steve Schwarzman, pooped on the floor and on a conference table during their visit.

SeaWorld is one of Blackstone's portfolio companies.  

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Billionaire private equity tycoon Steve Schwarzman has donated $100 million to endow a scholarship program similar to the Rhodes Scholars at Tsinghua University in Beijing, according to a press release. 

Instead of Rhodes Scholars, the students will be called "Schwarzman Scholars." 

According to the release, the program will pay for 200 students every year to study for a one-year Master’s program at Tsinghua University.

Most of the students in the program will come from the U.S. They will also come from Europe, South Korea, Japan, India and other countries.

Schwarzman is seeking a $300 million endowment for the scholarship program. So far, he and other private donors have raised $200 million, the release said.

According to Tsinghua University, they will be constructing the teaching building for the program. It's being designed by Professor Robert Stern, the dean of the School of Architecture at Yale University (Schwarzman's alma mater). 

The building is scheduled to be completed by 2015 and the first class of Schwarzman Scholars is expected to be in 2016. 

Here's the full release: 

Blackstone founder Stephen A. Schwarzman today announced a $100 million (¥600 million) personal gift to build and endow an elite scholarship program in China inspired by the prestigious Rhodes Scholarship program created in 1902 by British statesman Cecil J. Rhodes. A simultaneous fundraising campaign with a goal of raising $200 million (¥1.2 billion) will make the program the largest charitable effort in China’s history with funds coming largely from outside the country. The “Schwarzman Scholars” program will be housed at Tsinghua University in Beijing, one of China’s most prestigious universities, dedicated to academic excellence and integrity, and the interaction between Chinese and Western cultures.

“Schwarzman Scholars will prepare future leaders to interact in a constructive and collaborative way - learning to balance healthy competition with being able to forge lasting partnerships.”

Said Stephen A. Schwarzman, “When Cecil J. Rhodes created the Rhodes Scholarship program in 1902 to promote international understanding, Europe was at the center of gravity for the world’s economy, and the United States, the British Empire and Germany were the world’s most influential global players. While the 20th century was defined by U.S. ties to Europe, there is no question that the nature of China’s international relationships will play at least as important a role in this century.”

He continued, “China’s economy is growing at three times the rate of the West, and if that growth continues, China will become the largest economy in the world within the next couple of decades. Disproportionate levels of growth often create global imbalances and tensions, which will need to be addressed in the decades ahead. Looking to the future, it is crucial that both countries and others around the world work hard to build on a foundation of interdependence, to foster stronger and deeper relationships, and to develop a real and full understanding of each other’s cultures among the next generations of business and political leaders. In the 21^st century, China is no longer an elective course, it’s core curriculum.

“For the West, this means developing a far richer and more nuanced understanding of China’s social, political and economic context. A win-win relationship of mutual respect between the West and China is vital, benefiting Asia and the rest of the world, and enhancing economic ties that could lead to a new era of mutual prosperity.

“Leveraging the world-class resources and talented people at Tsinghua University, one of China’s most prestigious universities, the program will bring together an exceptional group of students who, we hope, will one day have the power to change the course of history.”

Schwarzman Scholars will support 200 students annually for a one-year Master’s program at Tsinghua University under the direction of Dean David Daokui Li, a prominent Chinese economist and former member of China’s currency board. Students will hail predominantly from the U.S., but also from Europe, South Korea, Japan, India and other areas of the globe. Students will live in Beijing for a year of study and cultural immersion, attending lectures by heads of state, traveling throughout the country, and developing a true understanding of China.

The first class of students is slated for 2016, upon the completion of Schwarzman College, a residential building designed specifically for the program. Robert A.M. Stern, Dean of Yale’s School of Architecture, designed the building, which is based on the residential colleges at Harvard, Yale, Oxford and Cambridge. The admissions season will open in 2015.

Schwarzman Scholars has a world-class Advisory Board whose members have unparalleled insight and experience in international policy and diplomatic challenges. Members of the Advisory Board include:

• Nicolas Sarkozy, Former President of the French Republic (Honorary);
• Anthony “Tony” Blair, Former Prime Minister of the United Kingdom (Honorary);
• Brian Mulroney, Former Prime Minister of Canada (Honorary);
• Kevin Rudd, Former Prime Minister of Australia (Honorary);
• Tung CheeHwa, Vice Chairman of the 12^th National Committee of the Chinese People’s Political Consultative Conference (Honorary);
• Henry Kissinger, 56^th United States Secretary of State (Honorary);
• Colin Powell, 65^th United States Secretary of State (Honorary);
• Condoleezza Rice, 66^th United States Secretary of State (Honorary);
• Henry “Hank” Paulson, 74^th United States Secretary of the Treasury (Honorary);
• Robert “Bob” Rubin, 70^th United States Secretary of the Treasury, Co-Chairman of the Council on Foreign Relations (Honorary);
• Sir James “Jim” Wolfensohn, 9^th President of the World Bank Group (Honorary);
• Richard Haass, President, Council on Foreign Relations (Honorary);
• Richard “Rick” Levin, President of Yale University (Honorary);
• Richard Brodhead, President, Duke University (Honorary);
• Chen Ning Yang, Nobel Laureate and Honorary Director of the Institute of Advanced Study at Tsinghua University (Honorary);
• John Thornton, Chairman of the Brookings Institution and Professor and Director of Global Leadership at Tsinghua University (Honorary);
• Yo-Yo Ma, the renowned American cellist (Honorary); and
• Iain Conn, Managing Director, BP plc.

Former U.K. Prime Minister Tony Blair commented: “Schwarzman Scholars will prepare future leaders to interact in a constructive and collaborative way - learning to balance healthy competition with being able to forge lasting partnerships.”

Said Ambassador Gary Locke, U.S. Ambassador to China: “The Schwarzman Scholars program will help the United States and China strengthen ties in all aspects of our bilateral relationship by deepening mutual understanding between both countries, and by creating the interpersonal connections from which a shared vision of future engagement and cooperation can emerge.”

Added Condoleezza Rice, former U.S. Secretary of State: “The rise of China presents both opportunities and challenges. The future of our countries is intertwined both economically and politically. There is no better way than through the development of the next generation of leaders to ensure mutual respect and understanding going forward. That is the critical mission of the Schwarzman Scholars.”

Said Henry Kissinger, former U.S. Secretary of State: “The rise of China is one of the central challenges of our time and as global citizens, we need to forge a deeper understanding between the U.S. and China, and diminish cultural biases to mitigate possible tensions and create opportunities for both countries. Close relationships, cultural understanding and open communication are required to sustain a peaceful world and to avoid conflict. Our hope is that, based on the knowledge, relationships and perspectives gained through this pivotal experience, Schwarzman Scholars will one day help shape the future of international discourse and interaction.”

Said Dr. John Hood, Chair of the Rhodes Trustees: “The Schwarzman Scholars program is visionary, timely and sure to capture the competitive enthusiasm of those who are among the most outstanding international and Chinese graduate students, in the same way as the world's great Scholarship programs have done during the past century.”

Additional endorsements can be found below.

Students will have a choice of four academic disciplines: Public Policy, International Relations, Economics & Business and Engineering. Additional disciplines will be added in future years. The academic program was developed in consultation with an Academic Advisory Council comprised of individuals from prestigious institutions of higher learning such as Harvard, Yale, Princeton, Stanford, Duke and Oxford.

Said President Jining Chen of Tsinghua University: “The world is at an important crossroads that calls for institutions of higher education to step forward and play a significant role in shaping the future of international relations. Tsinghua is honored to partner with Mr. Schwarzman to establish a scholarship program that will help educate and prepare the next generation of global leaders.”

Said David Daokui Li, Dean of Schwarzman Scholars: “Constructive cooperation should be a key cornerstone of Sino-U.S. relations for the future, and I am very excited to join President Chen, Mr. Schwarzman and the illustrious Advisory Board of Schwarzman Scholars to build a new center for scholarship and international discourse.”

Members of the Academic Advisory Council are:

• Mary Brown Bullock, Executive Vice Chancellor, Duke Kunshan University;
• Dr. Michael Cappello, Professor of Pediatrics, Epidemiology, and Microbial Pathogenesis, Yale Program in International Child Health and Director, Yale World Fellows Program, Yale University;
• Thomas J. Christensen, William P. Boswell Professor of World Politics of Peace and War and Director, China and the World Program and Faculty Chair, M.P.P. Program, Princeton University and Former Deputy Assistant U.S. Secretary of State for East Asian and Pacific Affairs;
• Jane Edwards, Associate Dean of Yale College, Dean of International and Professional Experience, Yale University;
• Louis Goodman, Professor and Dean Emeritus, School of International Service, American University;
• William C. Kirby, Spangler Family Professor of Business Administration, T.M. Chang Professor of China Studies, Harvard;
• Sir Colin Lucas, Former Vice Chancellor, Oxford University;
• Edward Macias, Provost, Washington University at St. Louis;
• F. Warren McFarlan, Albert H. Gordon Professor of Business Administration, Emeritus, Harvard;
• Jean C. Oi, William Haass Professor in Chinese Politics and a Senior Fellow of the Freeman Spogli Institute for International Studies at Stanford University;
• Steve Orlins, President, National Committee on U.S.-China Relations;
• Susanne Weigelin-Schwiedrzik, Professor and Vice-Rector for Research and Career Development, University of Vienna;
• Dr. Pauline Yu, President, American Council of Learned Societies;
• Xinsheng Zhang, Former Vice Minister of Education; and
• Dr. Ji Zhou, Former Minister of Education and President of the Chinese Academy of Engineering.

As of April 21, 2013, the Schwarzman Scholars program has achieved $200 million (¥1.2 billion) toward its overall $300 million (¥1.8 billion) capital and endowment campaign goal. In addition to Mr. Schwarzman’s personal gift of $100 million (¥600 million), the program has succeeded in raising $100 million (¥600 million) from private donors over six months.

Cornerstone Partner donors include BP. Founding Partner donors include: Chan Soon-Shiong Family Foundation; EMC Corporation; and Ray Dalio. Partner donors include: Bank of AmericaMerrill Lynch; The Boeing Company; China Resources (Holdings) Company Ltd.; and GE. Funder donors include: Bloomberg Philanthropies; Digicel; J.P. Morgan Chase & Co.; and Margarita Louis-Dreyfus. Other donors include: Caterpillar; Credit Suisse; Deloitte LLP; Fluor Corporation; and Sun Capital Partners Foundation, Inc. There are numerous donors at various levels that have asked to be anonymous. The Chinese and other international markets will be approached for philanthropic support following the announcement.

Said Iain Conn, Managing Director, BP plc.: “BP is very pleased to be a Cornerstone Partner in the Schwarzman Scholars Program. Enhancing the understanding between China and the World through the development of Chinese and international talent at Tsinghua University will be invaluable over time to all international institutions with Chinese interests, and therefore also to BP. This involvement also deepens BP's long-standing collaboration with Tsinghua University.

“BP is honored to be supporting the Schwarzman Scholars Program, and in doing so deepening our commitment to China's future through the advancement of education and international relationships. Together we hope to build a unique platform for future leaders to gain real-life global experiences and have interaction with political, business and thought leaders, with the vision of fostering greater understanding and more meaningful dialogue between China and the world. Through our involvement, BP will assist in advising the School, support 14 BP Fellows each year as part of the program, and engage with successive cadres of Scholars.”

Said W. James McNerney, Jr, Chairman, President and CEO, The Boeing Company: “Collaboration is a bridge that enables the United States and China to grow and prosper together. Boeing supports the Schwarzman Scholars program because it will help develop future leaders with global sensibilities and further strengthen the ties between our two countries.”

Schwarzman and Chen commented: “We thank our Cornerstone and Founding Partners, and all of our donors for their early support. Their intuitive recognition of the importance of this program and generosity will help ensure the Schwarzman Scholars program is endowed in perpetuity.”

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Billionaire private equity tycoon Steve Schwarzman is doing something really patriotic.

Today, he announced that Blackstone Group will hire 50,000 military veterans.

These hires will be made within Blackstone's portfolio of companies over the next five years, the firm said in a release.  

Here's the full press release: 

Blackstone (NYSE:BX) today announced it has partnered with The White House to support veterans and military families.  Led by First Lady Michelle Obama and Dr. Jill Biden, “Joining Forces” is a national initiative to encourage private sector hiring of America’s veterans. Blackstone plans to hire 50,000 veterans across its portfolio of companies over the next five years. 

“Veterans embody many of the skills, talents and personal attributes we look for in employees. They have high integrity; they are collaborative, hardworking and they are able to adapt to dynamic situations,” said Blackstone Chairman, CEO and Co-Founder Steve Schwarzman. “Veterans are reliable, motivated and trustworthy employees – the type of people that will help Blackstone’s portfolio companies succeed and grow. We are proud to partner with the President and Mrs. Obama, Vice President and Dr. Biden to do our part to help the men and women who have served our country develop successful careers following their military service.” 

Blackstone also plans to put in place support structures, including a management trainee program, which will help veterans transition into their new private sector careers.

Steve Schwarzman added, “Training and mentoring can help cultivate skills and ease the transition to civilian life.  We want to help veterans build life-sustaining careers after their service to this country has ended.”

[Hat Tip: Dan Primack]

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Lavish 60th birthday bashes are still a hot trend in the private equity and hedge fund world. 

Page Six reports that hedge funder Thomas Kempner, Jr., who runs Davidson Kempner Capital Management, celebrated his birthday on Wednesday night at the Museum of Natural History complete with a Billy Joel concert.

Joel played for the audience of financial heavy-hitters, which included Dan Loeb and Blackstone's Tony James, for an hour and a half, the report said.  The Post estimates that the performance costs up to $2 million. 

In 2011, Apollo Management's Leon Black celebrated his 60th with a huge bash in the Hamptons. The guest list included Julian Robertson, Michael Milken, Lloyd Blankfein and Steve Schwarzman.  At his party, Elton John gave an hour-and-a-half performance that cost at least $1 million, according to Dealbook. 

The trend really goes back before the financial crisis with private equity billionaire Steve Schwarzman's 60th birthday celebration.

Back in 2007, Schwarzman celebrated the occasion with a party at the Seventh Regiment Armory on Park Avenue, Dealbook reported.  His guest list included big names such as  Donald and Melania Trump, Maria Bartiromo and Barbara Walters.  Musician Rod Stewart headlined the event. 

According to the Post, Joel played "Allentown" for Kempner's guests. Here's the music video.  

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Hedge fund billionaire Bill Ackman, the CEO of $12 billion Pershing Square Capital Management, is funding a scholarship program aimed at helping social entrepreneurs receive an MBA from the University of Oxford. 

The Pershing Square Foundation, a charitable organization Ackman co-founded with his wife Karen, announced the launch of the Oxford Pershing Square Graduate Scholars Program last night with a gift of $6.6 million to endow the scholarships.  

The purpose of the scholarship program is to bring on young leaders and innovators who want to "address world-scale challenges for the benefit of society."

Social entrepreneurs are people who want to find solutions for social problems.  For example, one of the students is helping shrimp farmers in Southeast Asia use low cost instrumentation to measure water salinity. These aren't MBA students who want to work for hedge funds or investment banks.   

The PSF has endowed up to five fully funded Scholarships each year for the MBA component of Oxford's 1+1 program, which allows students to do the one-year Oxford MBA paired with one of many of the university's other master's programs. 

The scholarship program is open to students globally. The first group of scholars will start in the fall of 2014.

What makes this program such an obvious choice is that it gives students "depth and breadth," Oxford's Saïd Business School Dean Peter Tufano explained to Business Insider.

"It takes both domain expertise and management skills to solve problems. Simply having a broad set of skills without knowing the facts about the problem it's really hard to, for example, address issues of water policy, address environmental issues, fix education. All of these things require that you know something about the underlying phenomenon. So what we've created with our 1+1 program is an ability to first get depth and then get breadth of management skills," Tufano said.

Tufano was Ackman's finance professor at Harvard Business School, so we had to ask him what he was like as a student.

"I think he's like the person that you see now— very smart, determined, asked lots of questions," he said.  He couldn't remember where Ackman sat in the classroom, but that didn't matter. You knew he was there. 

We caught up with Ackman at a reception at the Park Avenue Armory last night in Manhattan's Upper East Side to celebrate the new partnership between the Saïd Business School and The Pershing Square Foundation.

He recalled his school days for us.

"I remember it well. I can say I learned a lot. So pay it back."  

The activist/long term value investor, who usually focuses on early and high school education, told us why he's so excited about this scholarship.

"Higher education has plenty of support. I'm more concerned with early education, frankly, and high school education. This is sort of a unique thing this is supporting people who want to be social entrepreneurs and giving them the opportunity to get a business school education and that's why I think it's important," Ackman told us in an interview.

Despite increasing costs with higher education, Ackman, who graduated from Harvard and Harvard Business School, still believes it's a viable investment for most Americans. 

"Yes, but I would say the the following: The problem with a business school degree is that it's very expensive and you have to take, in order to pay back your loans, a very high paying job, which pushes people to Wall Street and consulting and those kind of jobs, not that there's anything wrong with that. But the talented entrepreneur that wants to save the world it's hard, save-the-world jobs tend not to pay well. So if you're burdened with student loans absent from having the resources from your family it's hard for you to pursue a non-for-profit initiative." 

During his address to the crowd, he explained just how fortunate he was having his parents help pay for his higher level education.

"I was one of the people fortunate enough who had parents pay for my business school education. I went into business. Had I been interested in pursuing something social focused on finding water...for people without water in Africa or if I wanted to change the health care system, it would be hard to pay back my student loans with the entry level opportunities."

Also present at the reception last night was Dr. Paul Farmer, the co-founder of Partners in Health, private equity billionaire Stephen Schwarzman, Paul Bernstein, the CEO of the Pershing Square Foundation and Ackman's family, including his wife, Karen, teenage daughter, sister and parents, Larry and Ronnie.

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Just a snap shot of what's going on at the Bloomberg Markets 50 Conference.

Two serious dealmakers, JP Morgan's legendary Jimmy Lee and Blackstone CEO Steve Schwarzman just left the stage after speaking really candidly about the mergers and acquisitions landscape right now.

And actually, they're kind of funny.

The duo used humor to talk about some serious stuff, however. One matter that caught our attention was that Schwarzman and Lee agreed that in terms of deal making, the 1980s are back.

Lee started it off saying: "There is some sort of echo of the 80s... behavior that is non-acceptable, it starts creeping up and becomes more acceptable. I wouldn't be surprised to see a private equity firm do something more unusual."

Schwarzman agreed. ""It's back...it's like Freddie Kruger."

"That movie didn't end well," said Lee.

If you're not familiar with what happened in mergers and acquisitions in the 1980s, just know this — it was the Wild Wild West. Think: Corporate takeovers, green money payouts to get corporate raiders to go away... Carl Icahn running even wilder than he is now.

It was crazy.

For more reading on this, pick up Barbarian's at the Gate by Bryan Burrough and John Heylar. It's about the deal to take RJR Nabisco private, and all the players are in there.

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Billionaire private equity chief Steve Schwarzman wins for the best photo bomb at Monday night's Met Ball. 

We spotted the Blackstone Group CEO in a photo of Donatella Versace on the red carpet. It's pretty great. 

We did a search for Schwarzman on AP Images and Getty and couldn't find anything from the ball of him. Looks like they were mostly focused on celebrities. 

Anyway, sound off in the comments section with your best caption. 

Check it out:

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Stephen Schwarzman doesn't own an Apple iPhone, a Samsung Galaxy, or any smartphone for that matter.

As I was leaving the Dealbook Conference at One World Trade Center on Thursday, I ended up in an elevator with the CEO of the private equity behemoth Blackstone Group.

Schwarzman, who has an estimated net worth of $10.7 billion, pulled out a gray flip phone from his coat pocket.

I was shocked.

Business Insider has learned that the model of Schwarzman's phone is a Nokia 6350. 

He actually prefers just a regular cell phone, according to a representative. 

"Steve uses his flip phone to make and get phone calls. It does that better and more easily than any other device. He has an iPad for everything else," Schwarzman's representative told Business Insider.

Ironically, as we were leaving the building, I overheard Schwarzman mention the poor cell service in the building.

He was right — the reception was terrible. I could barely make a call with my iPhone 5s (Only one went through).

Luckily, though, the Wi-Fi in the building was working great.

It's refreshing to see a billionaire who doesn't feel the need to carry a flashy smartphone. On the flip side, it's also nice knowing that it doesn't take a smartphone to make a billionaire.

NOW WATCH: 13 Things You Didn't Know Your iPhone 6 Could Do

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According to Blackstone Group co-founder Steve Schwarzman, young Wall Streeters should not be following in his footsteps.

Schwarzman co-founded his own firm in 1985 at age 37, which now has more than $290 billion under management. At the 21st Annual Venture Capital and Private Equity Conference, Schwarzman told Harvard Business School students that launching their own firms too early could ruin their careers, the New York Times reported Monday.

At the event, Schwarzman said, "The biggest mistake I’ve seen people make with their careers is, when they’re good, after two or three years — and they happen to be smart — they announce that they’re going out to start their own firm. I have begged, literally begged — I’ve had people come over to my house on Saturday — and begged them not to do that, because they’re going to destroy their careers, because they’re not old enough yet, they can’t raise enough money yet, they don’t have enough credibility."

“Every person who’s made that decision, in my view, has failed,” he went on. “Every one of them.”

Instead, Schwarzman said Wall Streeters should focus on apprenticeship, training and bringing something new to the market. When Schwarzman helped start the Blackstone Group, he already had years of experience under his belt. Not to mention a co-founder with a reputation and lots of contacts.

Without the right skills and circumstances, aspiring entrepreneurs won't be able to succeed. And according to Schwarzman, that kind of failure can be devastating. 

A failed firm can take years to bounce back from, Schwarzman said at the event.

“This is not Silicon Valley, where failure is an option,” he said.

Read the full story at the New York Times >>

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Blackstone Group CEO Steve Schwarzman has become the richest man in private equity, Bloomberg reported Thursday.

According to data compiled by Bloomberg, Schwarzman's dividend earnings in 2014 was nearly double that of last year's big earner, Leon Black from Apollo Global Management.

Schwarzman took home more than $500 million in dividends, compared to Black's $268 million, which fell 27 percent from last year. Last year Schwarzman earned $353 million.

Schwarzman's big paycheck comes after a record-breaking year for the Blackstone Group, which he co-founded in 1985. In January the firm reported record numbers for 2014 across many metrics, including earnings, assets and distributions. The firm now manages $290 billion in assets.

In contrast, Black's Apollo Global Management just released fourth-quarter and full-year reports, which saw drastic declines in earnings and distribution. Net income after tax fell to $567.9 million for 2014, compared to $2 billion the previous year.

Schwarzman himself is worth $11.7 billion, according to Bloomberg's Billionaire Index.

You can read the full report over at Bloomberg>>

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At a luncheon hosted by the Wall Street Journal, Blackstone CEO Steven Schwarzman said that his firm is working under the assumption that Europe will never grow.

“Our baked-in assumption is that Europe never grows,"Bloomberg quoted Schwarzman as saying,“you have to improve it..."

And by "improve" Schwarzman means making meaningful structural reform, which will require political action and consensus.

You can see why Schwarzman is not so optimistic, then.

This isn't to say Blackstone isn't invested in Europe. It raised $5.7 billion for a European real estate fund, two-thirds of which was committed by October of 2014, according to Bloomberg. Blackstone plans to make money from that investment, not through European growth, but by improving property and raising rents.

For more on this, head to Bloomberg> 

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Blackstone CEO Steve Schwarzman may be aggressive when it comes to business, but, he says, he's really a nice guy — and he likes his employees to be too.

"I don't like people who are not nice," he said at a leadership event on Tuesday, CNN Money reported.

And Schwarzman, who is the richest man in private equity, is quick to turn down candidates who lack the right personality traits — namely, niceness — when hiring for his star private-equity firm, Blackstone Group.

"They can be very, very smart, but they are the kind of person you wouldn't want to spend time with or expose your people to," he reportedly said.

That's more important to him than, say, an MBA degree. 

Schwarzman pointed to some of his executives who do not hold MBAs, such as Jon Gray, who runs the real-estate division. 

"Jon's got a gift. Obviously an MBA wouldn't have improved it too much," CNN Money quoted him as saying.

Read the full story over at Money >>

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Blackstone Group has been buying and selling iconic properties for years.

Late Friday, the private equity firm reportedly had a new one in its sights: Chicago's Willis Tower, previously known as the Sears Tower.

A report in Crain's Chicago pegged the purchase price for the skyscraper at roughly $1.5 billion; Blackstone is likely going to invest in the Willis Tower through one of its real-estate funds, rather than its flagship private equity fund.

Real estate makes up a big portion of Blackstone's enormous portfolio. According to its website, the firm has assets under management approaching $291 billion, and its real-estate portfolio makes up $81 billion of that. The Willis Tower, at 1,450 feet tall, was the tallest building in the world from 1973 until 1998.

Blackstone has a history of doing deals with iconic properties

The private equity firm is reducing its stake in another hotel chain, Hilton Worldwide Holdings, which has posted gains in excess of 30% since its late-2013 debut on public markets. Though shares have risen, Blackstone keeps chipping away at its stake, dumping stakes of about $2 billion worth of stock at a time into what looks like a receptive public market.

Hilton, which still counts Blackstone as its largest investor, has also made divestitures of its own: namely, the Waldorf-Astoria, which was sold last year from the chain to Anbang Insurance Group Co. in a deal worth nearly $2 billion.

Blackstone has a lot to be happy about right now

Blackstone is raising its seventh flagship private equity fund, which could grow to the $16 billion to $20 billion range, a source told Business Insider. In part thanks to the relative success of its largest all-time investment (Hilton) Blackstone is making the most of heady times, as other PE firms are struggling to raise new funds following postcrisis disappointments.

Also, Blackstone CEO Stephen Schwarzman is enjoying heady times, while others figureheads in the private equity industry have experienced various difficulties — from key assets' bankruptcies to collusion inquiries to disappointing funds. Schwarzman was reportedly the top-paid private equity executive last year.

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Steve Schwarzman brought in $690 million last year, making him one of Wall Street's highest-earning CEOs.

But according to Crain's New York Business, it's not going to stop there. 

In an article on Monday, Crain's estimated that the Blackstone CEO could bring in more than $1 billion in pay this year, based on the U.S. stock market highs and Blackstone's portfolio of more than 80 companies.

Schwarzman's success comes at a time when private equity business (and pay) is booming, compared to the rest of Wall Street. This year, Schwarzman surpassed Apollo Global Management's Leon Black as the highest-paid CEO in private equity.

Other private equity giants like Black and Carlyle Group's William Conway earned $331 million and $343 million, respectively. Goldman Sachs CEO Lloyd Blankfein pulled in $24 million in 2014, and JP Morgan's Jamie Dimon received $20 million.

According to Crain's, Schwarzman's 2014 compensation is the highest for a CEO of a public company. Other top-earners in public companies include Larry Ellison of Oracle, with $528 million in dividends last year, and Steve Jobs, who received $578 million in stock options in 2000. In contrast, Schwarzman was paid mostly in cash.

Read the full story at Crain's >>

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The Willis Tower could soon become the Blackstone Tower. 

Steve Schwarzman's private equity fund is buying the Willis Tower, it announced Monday. At 110 stories, the Willis Tower bills itself as the fifth-tallest office building in the world (it was first called the Sears Tower). 

Blackstone Real Estate Partners VII, a property investment fund that is totally separate from Blackstone's flagship private equity investment vehicles, is making the acquisition, though terms were not made public. However, a report in Crain's had suggested a price tag of $1.5 billion for the deal. On Monday, a report on CNNMoney pegged the purchase price at $1.3 billion. 

Blackstone has a recent history of striking big deals for iconic properties. Right before the financial crisis hit, Blackstone did its biggest deal in the form of a $26 billion deal for Hilton Hotels in 2007. Last year, Hilton was brought back onto public markets by Blackstone in a successful IPO, and as the private equity firm has reduced its share in Hilton the hotelier has also struck deals of its own, including the $1.95 billion sale of New York City's Waldorf Astoria hotel to Anbang Insurance Group Co., a Chinese firm. 

Blackstone CEO Schwarzman has had a good 2015 so far. His 2014 pay, announced last month at $690 million, far eclipsed his 2013 tally of less than $500 million.

UPDATE: Even though Blackstone is taking possession of the Willis Tower, it will take until 2025 for naming rights to expire. 

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In some ways, Blackstone CEO and co-founder Stephen Schwarzman is like most of the folks who go to work at a Wall Street financial services firm.

His annual salary — $350,000 — hasn't changed since Blackstone went public in 2007.  The tale of flat salaries is one that’s all too familiar for Wall Street's professionals these days.

But Schwarzman isn't going to find a sympathetic ear. In 2014, his total compensation — a number that totals annual salary, annual bonus, dividends, and long-term incentives like equity — rose to about $690 million.  By the end of this year, he could be taking home $1 billion.

You see, being a Wall Streeter is kind of like being a waiter. You're promised a base rate of pay. But the bulk of the compensation comes from supplemental pay like tips.  Except for Wall Streeters, those tips usually look like 6- to 7- figure annual cash bonuses, and 7- to 8- figure equity-based bonus like stock options.

In New York, it still pays to work in finance, especially as the economy improves and the financial markets rebound. But the players seeing their total comp boom are Wall Street's titans (like Schwarzman) and the young talent just starting their careers.

Indeed, the young talent is relatively cheap compared to veteran bankers who haven't made it to the top of the heap. As Wall Street continues to find ways improve profitability, this  'middle class' of finance is going away.

Annual salaries on Wall Street remain below post-crisis levels

The typical compensation package for a Wall Streeter consists of at least an annual salary and an annual cash bonus.

While statistics say Wall Street bonuses are on the rise, Wall Street salaries aren’t keeping pace. In fact, according to New York City Independent Budget Office Data, here, securities sector average wages have struggled for seven years to catch back up to where pay was pre-crisis. Look below. They haven’t caught up yet:

Fat annual bonuses confirm cash is king

According to compensation experts, while total compensation has stagnated at top banks for dealmakers and managers, bonuses have risen substantially in many places.

Investment banks go out of their way to keep staffing specifics vague and opaque, said Jessica Lee, director with executive recruitment firm Options Group. But it's broadly understood that one of the best ways to attract the best talent is to offer a competitive annual cash bonus incentive.

That, some bankers have said to Business Insider, is what makes smaller investment banks like Perella Weinberg Partners more attractive to those who would rather avoid accepting deferred compensation (e.g. stock options and restricted stock that vest over several years) that, in some instances, is dependent on the bank's overall health long-term, more than an individual's performance. 

And it may be especially true right now: a separate survey from the Office of the State Comptroller released earlier in March shows industry bonuses are tracking all-time highs.

To industry spectators and outside of the banking industry, it may seem garish that the average bonus on Wall St. is three times the average American family’s total household income. 

Equity-based deferred compensation is how Wall Street's richest get richer

What differentiates the senior Wall Street pros from their younger counterparts is the terms of their deferred compensation, which usually includes a lot of equity through restricted stock and options.

The majority of Schwarzman's 2014 pay came through dividends, which he is due thanks to his double-digit stake in Blackstone. His company generated a profit of $4.3 billion last year; Schwarzman’s stake entitled him to more than $570 million.

There is no investment bank CEO who owns as much of a bank as the head of Blackstone. However, Goldman Sachs' Lloyd Blankfein, Morgan Stanley's James Gorman, JP Morgan's Jamie Dimon and Citi's Michael Corbat have all raked in 8-figure annual total compensation packages as their more modest 7-figure annual salaries have been combined with equity-based compensation like options and restricted stock.

This deferred, or long-term, compensation typically vests over time, taking up to five years to totally pay out. Depending on the bank, deferred comp only begins at a certain rank (some places, it begins for vice presidents, at others, the minimum rank for eligibility is managing director). 

“They have to stay longer and longer to get the same paycheck they’d have gotten a few years ago,” said Matan Feldman founder and CEO at Wall Street Prep, referring to deferred compensation regulations implemented at Wall Street’s biggest banks post-crisis.

Investment banks that created elaborate compensation plans to simultaneously pay executives millions, while still satisfying new regulations.

"It doesn't seem there is any consistency for what they have to do to compensate executives," says Jessica Lee, director with executive recruitment firm Options Group. 

Still, if you're willing to commit and play the long game, you can do very well as a senior executive at a Wall Street firm.

Wall Street is paying up for the freshest talent and looking at outside the priciest cities for cheaper talent

The one place compensation experts agree pay has risen is among the youngest professionals.

First- and second-year analysts generally earn in the $115,000 to $135,000 range, according to data maintained at WallStreetOasis.com, a site that focuses on finance sector employment data. First- and second-year associates earn in the $160,000-$210,000 range. Vice presidents make around $500,000 annually and managing directors’ pay has grown to as much as $600,000. All of these tallies factors in bonus alongside annual salary.

As Wall Street firms look for ways to boost profitability, they've been letting go of mid-level employees and focused on boosting the ranks of cheaper, younger talent. 

They've also been looking outside the expensive metro areas to recruit. Post-crisis, the banking industry has added jobs, but in New York, according to data from the state labor department, banking and securities jobs are down roughly 20% to date. Part of this has come as top banks have jettisoned thousands of jobs elsewhere in the U.S.

On the flip-side, some say, Wall St. pros are finally benefiting from workforces at banks and elsewhere streamlining staff headcount in the wake of the financial crisis. 

“Outperformers have a better life than they would have had because they’re not carrying mediocre people,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business, adding, still "it’s a little harsher now.”

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Blackstone posted another solid quarter of earnings this morning.

CEO Steve Schwarzman is feeling pretty good about his investment firm, and its prospects, in light of yet.

"We're like an Apple, a Google, a Boeing, a [Caterpillar], a Hermes," Schwarzman said this morning with Betty Liu's In the Loop on Bloomberg TV. "We have customers who need us." 

It sounds weird, but he's right. Blackstone is the glossiest brand it in its industry. It is the biggest private equity firm in the world and it seems like everyone wants to work with Blackstone and Schwarzman.

Lately, the strength of Blackstone has been its real estate investing. That's one big reason why it was able to join with Wells Fargo to buy GE's real estate holdings for $26.5 billion. 

It's hard to imagine any other private equity shop would have been able to do that deal.

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We're all familiar with the glass ceiling on Wall Street, but in private equity that glass is exceptionally thick.

Women make up less than 11 percent of senior managers at then ten biggest firms, reports Bloomberg's Madeline McMahon and Devin Banerjee. They took a look at a handful of top firms and found some pretty striking results.

Tim Geithner's Warburg Pincus, for example, has 70 partners – but only two of them are women. At Providence Equity, three of 43 senior people are reportedly women.

Steve Schwarzman's Blackstone Group, which recently decided to extend its maternity leave, has the most women in executive and managing director roles – 58. But that still makes up less than 16 percent of the firm's total 370 senior people.

In second place, Carlyle, with 14 percent senior women, is actually down slightly from the 14.4 percent they employed three years ago.

The biggest challenge, according to the firms, is getting women to apply to the companies in the first place. At Blackstone, only about 10 percent of entry-level applicants are women, a spokesperson told Bloomberg.

So is the problem that there aren't enough women at the bulge bracket banks, where PE firms often recruit analysts and associates? Or is it that women are choosing to stay at the banks rather than move to PE?

Either way, some firms have begun recruiting at college campuses to target women early for summer internships and entry-level roles, which could eventually lead to senior positions.

About a quarter of Blackstone's summer interns will reportedly be female this year. Maybe that will work.

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