The gap between Fink and Schwarzman, both in strategies and personal fortunes, says a lot about their respective business models.
Fink has trailed in personal wealth because he owns only a tiny piece of BlackRock: 0.7 percent. Back in 1994, Blackstone sold its stake in Fink’s outfit as Schwarzman railed against dilution because of Fink’s desire to award new hires equity in the business to lure them from top banks. Since then, Fink’s continued to spread ownership among his employees and used BlackRock stock to make key acquisitions. He’s also held on to much of his original management team -- five of the eight co-founders are still involved -- and avoided the Gordon Gekko image some associate with private equity.
That Fink has managed to pass the billion-dollar mark is, in fact, a testament to BlackRock’s success. Since its 1999 listing, its share price has returned more than 3,600 percent. Blackstone’s shares have barely budged since its 2007 initial public offering.
A spokesman for Fink declined to comment on his net worth. Schwarzman didn’t respond to requests for comment.
Seller’s remorse? Schwarzman once said that unloading BlackRock was a “heroic” mistake. Today, he’s far richer than Fink but, in terms of assets and stock performance, BlackRock has won.
“When we started, we were two guys in a room with an idea and no revenue," said Ralph Schlosstein, who co-founded BlackRock with Fink and now runs Evercore Inc., the investment bank. “If someone had asked us where we’d end up, we might have said five or six. But billion, not trillion.”
This article was provided by Bloomberg News.