What It Takes: Lessons in the Pursuit of Excellence

by Stephen A. Schwarzman

The other disagreement we had was around equity in the business. Under our original agreement, Blackstone owned half of Blackstone Financial Management, Larry and his team the rest. We had agreed to reduce our stakes to 40 percent each, leaving 20 percent to be distributed as stock to employees. If there was any further dilution to be had after that, it would have to come out of Larry’s side. That was the deal. But before long, they asked us to give up more stock. I refused. Larry and his team were furious, saying they did all the work. I believed that once you signed something, you stuck to it, but in retrospect, I should have put the contract aside and accommodated Larry’s request. Blackstone, Larry, and his team ended up selling its stake in Blackstone Financial Management to PNC, a medium-sized bank in Pittsburgh. The only humor in it all came from the process of renaming the firm once it was owned by PNC. It could not be called Blackstone anymore. Larry thought there might be a way of retaining some institutional connection through a new name. He suggested Black Pebble or BlackRock. Black Pebble sounded puny to me. We settled on BlackRock. Selling

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