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Stephen Schwarzman’s Exceptional Investment Strategy that Made Him One of the Top Entrepreneurs In The World

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Stephen A. Schwarzman used his experience from being an Army Reserve in the U.S. and applied it in approaching his investments. This propelled him to become one of the richest men in America, with a net worth of $2.4 billion. Join me in taking a deeper dive into the man behind Blackstone Group.

Who Is Stephen Schwarzman?

Stephen Allen Schwarzman was born on February 14, 1947, in Huntingdon Valley, Pennsylvania, the son of Arline and Joseph Schwarzman. His father owned Schwarzman’s, a former dry-goods store in Philadelphia, and was a graduate of the Wharton School. That gave him the motivation to find something else to do, he would say in a later interview.

“It provided a unique model of something I did not want to do… I found it an absolutely horrible way to spend time. I didn’t like waiting on customers, I didn’t like folding merchandise. I didn’t like dusty basements where you had to mark merchandise, and I decided that whatever I did in life, that would not be part of it.”

Schwarzman attended the Abington School District in suburban Philadelphia and graduated from Abington Senior High School in 1965. He attended Yale University, where he was a member of senior society Skull and Bones. After graduating in 1969, he briefly served in the U.S. Army Reserve before attending Harvard Business School, where he graduated in 1972.

Schwarzman married his first wife Ellen Philips in 1971, a trustee of Northwestern University and the Mount Sinai Medical Center, and they divorced in 1990. They have three children together, including film producer Teddy Schwarzman and writer and podcaster Zibby Owens. Schwarzman married his second wife Christine Hearst in 1995, an intellectual property lawyer who grew up on Long Island, New York. He lives in a duplex apartment at 740 Park Avenue previously owned by John D. Rockefeller Jr.

Blackstone

Schwarzman’s first job in financial services was with Donaldson, Lufkin & Jenrette. After business school, Schwarzman worked at the investment bank Lehman Brothers, became a managing director at age 31, and then head of global mergers and acquisitions. In 1985, Schwarzman and US Secretary of Commerce, Peter Peterson, started The Blackstone Group, which initially focused on mergers and acquisitions. Blackstone would branch into business acquisition, real estate, direct lending, alternative assets, and now has some $500 billion in assets under management. When Blackstone went public in June 2007, it revealed in a securities filing that Schwarzman had earned about $398.3 million in fiscal 2006. He ultimately received $684 million for the part of his Blackstone stake he sold in the IPO, keeping a stake then worth $9.1 billion. In an interview, Schwarzman described his view on financial markets with the statement: “I want war, not a series of skirmishes… I always think about what will kill off the other bidder.”

In September 2011, Schwarzman was listed as a member of the International Advisory Board of the Russian Direct Investment Fund.

Politics and Other Significant Works

Schwarzman is a Republican. He is a long-time friend of former President Donald Trump and provides outside counsel, and served as chair of Trump’s Strategic and Policy Forum. He raised $100,000 for George W. Bush’s political endeavors. In 2012, Obama called Schwarzman and requested his assistance in brokering a budget agreement with Republicans in Congress to avoid a fiscal cliff. Eventually, a deal was brokered with Schwarzman’s help. The new tax plan added $1 trillion of additional revenue by raising taxes, closing tax loopholes, and ending deductions. Obama later drafted a formal message of support for Schwarzman Scholars, an education initiative undertaken by Schwarzman.

In early 2016, he said that in a two-candidate race he would prefer Donald Trump to Ted Cruz, saying that the nation needed a “cohesive, healing presidency, not one that’s lurching either to the right or to the left.” He had previously made a donation to Marco Rubio in 2014. He also endorsed and fundraised for Mitt Romney in 2012. In late 2016, Schwarzman “helped put together” a team of corporate executives to advise Trump on jobs and the economy. The group, which includes JPMorgan Chase CEO Jamie Dimon, Walt Disney boss Bob Iger, and former General Electric leader Jack Welch, became Trump’s Strategic and Policy Forum. In February, Schwarzman was named as chair of the 16-member President’s Strategic and Policy Forum, which brings together “CEOs of America’s biggest corporations, banks, and investment firms” to consult with the President on “how to create jobs and improve growth for the U.S. economy.” On August 16, 2017, following five members’ resignations, President Trump announced via Twitter he was disbanding the forum.

In 2004, Schwarzman donated a new football stadium to Abington Senior High School—the Stephen A. Schwarzman Stadium. In early 2008, he announced that he contributed $100 million toward the expansion of the New York Public Library, for which he serves as a trustee. The central reference building on 42nd Street and Fifth Avenue was renamed The Stephen A. Schwarzman Building. In 2018, Schwarzman donated 10 million to another library, the National Library of Israel.

On April 21, 2013, Schwarzman announced a $100 million personal gift to establish and endow a scholarship program in China, Schwarzman Scholars, modeled after the Rhodes Scholarship program. He simultaneously announced a fundraising campaign with a goal of $200 million. The Schwarzman Scholars program is housed at Tsinghua University. Since its inception, the program has maintained ties to the United Front Work Department as well as other organizations and personnel affiliated with the Chinese Communist Party.

In spring 2015, Peter Salovey, the President of Yale University, announced that Schwarzman contributed $150 million to fund a campus center in the university’s historic “Commons” dining facility. He has sat on the Board of Trustees of New York-Presbyterian Hospital since 2016.

Schwarzman has been an adjunct professor at the Yale School of Management and was chairman of the board of trustees of the John F. Kennedy Center for the Performing Arts from 2004 to 2010.

In December 2018, Schwarzman was awarded the Order of the Aztec Eagle, Mexico’s highest honor for foreigners, by President Enrique Peña Nieto in recognition of Schwarzman’s work on behalf of the U.S. in support of the U.S.-Mexico-Canada Agreement. In 2019, Schwarzman wrote his first book titled, What It Takes: Lessons in the Pursuit of Excellence, “which draws from his experiences in business, philanthropy, and public service.” His book became a New York Times Best Seller.

3 Tips From Stephen Schwarzman

“I don’t feel like a wealthy person. Other people think of me as a wealthy person, but I don’t. I feel the same as when I was a fifth-year associate trying to make a partner at Lehman Brothers. I haven’t changed.”

“This country, of course, needs fundamental reform of our financial regulatory system, as I, and many other financial institution executives, have publicly advocated for a considerable period.”

“My father was very bright. My mother had an enormous drive. Put that together, and that’s my gene pool.”

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