Episode 37 - Steve Schwarzman: The New King of Capital

After the corporate raiders of the 80s came a new, more sophisticated force on Wall Street: private equity. This episode tells the story of Steve Schwarzman, the co-founder of the Blackstone Group, who became the undisputed king of this new financial empire. We trace Schwarzman’s journey from a Lehman Brothers executive to the head of a firm that would become the largest alternative investment firm in the world, with trillions of dollars in assets under management.

We demystify the world of private equity, explaining Blackstone’s business model: using massive amounts of debt to buy entire companies, ruthlessly cutting costs and restructuring operations away from public scrutiny, and then selling them for a huge profit a few years later. We examine some of Blackstone’s biggest deals and their societal impact, from its massive real estate investments that made it the world's largest landlord to its takeovers of iconic companies. To his supporters, Schwarzman is a master of value creation, making companies more efficient. To his critics, he is a "barbarian at the gate," a new kind of corporate raider who profits by firing workers and loading companies with debt.

Steve Schwarzman represents the modern face of Wall Street power—less bombastic than the raiders of the past, but arguably more powerful and pervasive. His story is the story of how private equity came to own a vast swath of the global economy, operating in the shadows far from the eyes of regulators and the public.