Wall Street’s young guns
Blackstone has a rep for growing young talent. Steve Schwarzman’s strategy: managing overachievers
How Blackstone grooms talent
Plenty of young guns work away at the big banks, but the Blackstone Group gives autonomy and power to its rising stars to such a degree that it has garnered a reputation as one of Wall Street’s most effective talent incubators.
Consider Jonathan Gray. At age 37 he led Blackstone’s largest-ever real estate deal and the biggest buyout of its day, the $39 billion Equity Office Properties deal. In meetings, the youngest associates must opine on deals first, and it’s not unusual for them to go toe-to-toe with a Wall Street veteran like president Tony James. Here’s how the firm creates a culture where risk taking is the norm, followed by five fresh-faced stars that have made names for themselves at the firm and on the Street.
Stephen Schwarzman
Chairman, CEO and co-founder
Age: 63
Blackstone’s culture begins with silver-haired founders Pete Peterson and Stephen Schwarzman, who are no strangers to youthful ambition. As Peterson’s young protégé at Lehman, Schwarzman became a managing director at by age 31. Unsurprisingly, the firm they built together holds even its youngest associates to a very high standard and rewards them with great responsibility. Hire the best, enforce a meritocracy, and actively manage the tendency to overachieve. “A starting level person fails by taking on too much, and then not delivering,” says Schwarzman. “We encourage asking for help rather than pretending that all is fine.”
Joe Baratta
Senior managing director, private equity group
Age: 39
When he was just 29 years old, Baratta worked with David Blitzer, (then 31 years old) to launch Blackstone’s European arm in 2001. By 2006 they had invested more than $3 billion in 13 transactions. He has long been willing to defend his investment theses before skeptical elders, including an idea to take a controlling stake in a small amusement park company called Merlin for $60 million. Schwarzman was skeptical, but now he cites Merlin as a fantastic deal that made the firm more than three times its money and laid the groundwork for several similar acquisitions. Blackstone is now one of the largest theme park operators in the world, a portfolio that includes Madame Tussauds, Sea World, Legoland, and a host of water parks in Europe.
Christopher Heady
Managing director, real estate group
Age: 35
Heady, who just turned 35, was part of the original London team that included Baratta. Even though he was in his mid-20s, he had already gained some experience in real estate private equity during a short stint at Morgan Stanley’s London office.
Now he is based in Hong Kong where he heads real estate investments in Asia, including fickle markets like India. In just over a decade at the firm, his deals have included everything from amusement parks to office buildings, and they have been spread throughout Europe, Asia, and the U.S.
Ben Hakim
Managing director, Blackstone Advisory Partners
Age: 34
Hakim typifies many of the young people who come to Blackstone fresh out of school. He graduated with highest honors, got to the firm, and then quickly worked his way up the ranks until he was considered a go-to person for important assignments.
Working in the M&A advisory group, the native New Yorker specializes in real estate, media, and business services. Recent clients have included Pershing Square Capital and Intrawest’s creditors, General Growth Properties and Citibank. Hakim also played a senior role representing AIG’s post-crisis restructuring.
Sean Klimczak
Principal, private equity group
Age: 34
Klimczak, who graduated at the top of his class at Harvard Business School, could have written his ticket to almost any Wall Street firm. His decision to go to Blackstone was turned into a case study on how to make employment decisions. Now he specializes in energy deals and helps the firm recruit the best and the brightest. “They identify the same opportunity that I did when I came out of HBS,” he says. “It is the expectation, rather than the hope, that we take on significant responsibility at a very young age.” To wit: Klimczak sits on a total of eight boards, which he describes as a unique and humbling experience.
Julia Kahr
Principal, private equity group
Age: 32
Kahr became the youngest principal at the firm at the august age of 29, following the precocious path forged by Schwarzman at Lehman. She’s busy heading a program to buy and roll up companies that create materials used in road building — a series of small investments that has added up to about $1 billion in enterprise value.
In a recent Crain’s New York Business profile, president Tony James said Kahr had to fire an executive at a portfolio company who was also a friend, and that she did so in a way that “preserved everybody’s dignity.” That’s a lot of composure for someone so young, but that seems to be the Blackstone way.
