Blackstone swiftly became a leader in mergers and acquisitions involving U.S. and Japanese companies, guiding Sony Corp.’s purchases of CBS Records Inc. and Columbia Pictures and advising Firestone Tire & Rubber Co. in its acquisition by Bridgestone Corp.

Peterson and Schwarzman raised $840 million for a private-equity fund, Blackstone Capital Partners. The fixed-income investment group they created was bought by PNC Bank Corp. in 1994 and is now BlackRock Inc., the world’s biggest money manager.

The Schwarzman-Peterson partnership was strained by the lavish 60th birthday party Schwarzman threw for himself in February 2007, just months before Blackstone’s initial public offering. The party for 500, with entertainment by Rod Stewart, fueled the movement in Congress to raise taxes on executives at private-equity and venture-capital firms.

“Today, I am sorry to say that when people think about Steve, the 60th birthday party often detracts from his many accomplishments,” Peterson wrote in his 2009 memoir.

IPO Windfall
Blackstone’s IPO in June 2007 brought Peterson $1.85 billion, before taxes. He retired at the end of 2008 and put much of his money and time into the Peter G. Peterson Foundation, which advocates reducing budget deficits, curtailing federal entitlement programs and reducing dependence on oil.

“When it comes to the long-term fiscal and economic future, U.S. leaders are mute not only on domestic challenges but on global challenges too,” he wrote in his 2004 book, “Running on Empty.”

Peter George Peterson was born on June 5, 1926, in Kearney, Nebraska, a product of what he called that state’s “small and highly interwoven” Greek community.

Great Depression
His father, George Peterson -- born Georgios Petropoulos in Greece -- came to the U.S. at 17 and, in 1923, opened a 24-hour restaurant near Kearney’s railroad station. He married Venetia Papapavlou, another emigre from Greece.

Peterson worked in the restaurant as a boy and never forgot his father’s cry, during the Great Depression, of “Economia!” when he noticed lights left on or money otherwise wasted. Two siblings followed -- a sister, Elaine, who died at 1, and a brother, John.

Peterson was expelled from the Massachusetts Institute of Technology in 1944, his freshman year, for plagiarism after consulting -- though not copying, he always insisted -- a term paper written by a friend of a friend. The author of the paper was Roy Cohn, then a student at Columbia College, who later as a lawyer helped Senator Joseph McCarthy investigate alleged Communist sympathizers in the 1950s.