Knowing when to hold ‘em, and when to fold ‘em, has made Schwarzman a fantastic businessman.
A step above his peers
I could probably end right there and it would be more than sufficient as to describe why Steve Schwarzman is an incredible leader, but there’s actually so much more!
Obviously, shareholders are going to benefit in a big way from the high profit margins associated with Blackstone’s operations. With few staff and overhead needed to run hedge funds and orchestrate buyouts, much of what Blackstone generates is almost pure profit. That means it doesn’t take a home run every time to yield a solid dividend. Over just the past four quarters, shareholders in Blackstone have received $0.92 in payouts. That’s good enough for a 4% yield based on yesterday’s close and would be just about double what you’d be earning on a 10-year Treasury note.
Blackstone’s employees also benefit in a big way as well. In terms of compensation — because Blackstone is so picky in its hiring process to gain employees who’ll stay with the company over the long term — it’s the cream of the crop. In 2010, for instance, Blackstone set aside about $811,000 per employee for compensation. Furthermore, The Blackstone Group L.P. (NYSE:BX) has increased its headcount by about 25% since the recession, proving high-level jobs do still exist.
But, my personal favorite aspect of The Blackstone Group L.P. (NYSE:BX) and its CEO Steve Schwarzman is that he hasn’t allowed some $212 billion in assets under management to go to his head. In April, Schwarzman donated $100 million (not a typo!) to the Tsinghua University in Beijing, China. The reasoning behind Schwarzman’s donation was to create an elite level Master’s program for 200 Chinese students as well as others around the world. Schwarzman’s goal, with China playing such a large role in the world’s global evolution, is to ensure that China and its top minds don’t get left behind.
Two thumbs up
Private equity firms like The Blackstone Group L.P. (NYSE:BX) are certainly known for their ruthless cunning when it comes to investing and are often associated with posh lifestyles and spending. Contrary to this belief is Blackstone’s Steve Schwarzman, who has done a good job of creating wealth for shareholders, makes sure his employees are fully qualified and compensated well for their hard work, and is a huge philanthropist in the educational field. It’s not easy to trust a private-equity firm that offers no guarantee of future income, but as long as Schwarzman is at the helm of Blackstone, it will always have my vote of confidence.
The article This Is One Incredible CEO originally appeared on Fool.com.
Fool contributor Sean Williams owns shares of Dell, but has no material interest in any other companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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