Steve Schwarzman said his decision 19 years ago to sell what would become the world’s largest money manager was a 'heroic' mistake.
Bloomberg News reports that Schwarzman, who runs Blackstone Group, the largest manager of alternative investments such as private equity, in 1994 sold a mortgage-securities unit with $23bn in assets to PNC Bank Corp $240m.
Schwarzman, Blackstone’s co-founder, had disagreed with the group’s leader, Laurence Fink, over methods of compensation, and the men parted ways. The unit, which traded mortgages and other fixed-income assets, changed its name from Blackstone Financial Management to BlackRock Financial Management.
Today, BlackRock, which Fink leads as chairman and CEO, is the world’s largest money manager, overseeing $3.86 trillion in assets, dwarfing Blackstone’s $230bn. It has a market value of $46bn, compared with Blackstone’s $28bn.
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