From ai5000 Magazine: Life After Death

In 2007, Stephen Schwarzman, the chairman of the private equity giant Blackstone Group, completed the largest leveraged buyout in history for Equity Office Properties, threw himself a $3 million 60th birthday party, took Blackstone public with a $31/share IPO that closed out the day trading at $35, and was named the new “King of Wall Street” by Fortune magazine. That same year, private equity, along with hedge funds, Asian sovereign capital, and petroleum exporters, were named the four “new power brokers” on the international financial scene by McKinsey’s Global Institute think tank, which predicted that the Fab Four’s assets (which had tripled in the previous seven years to $8.4 trillion) would grow to more than $20 trillion by 2012 if things went well, and to at least $15 trillion if they went poorly.

Such innocent days. Following that high point, Blackstone’s stock price quickly tumbled to the mid-low teens, where it has more or less stayed. Schwarzman’s birthday party has come to be seen as an exemplar of the excesses of a dying empire, like Michael Milkin’s 1980s “Predators’ Ball” high-yield bond conferences, or Marie Antoinette’s playing peasant in mock village she built at Versailles. Private equity firms have languished as tightened lending and valuation cuts brought the market to a near standstill. Even people like James Kilts, a partner at Centerview Partners, one of the fastest growing boutique firms in the business, was saying that you could make an equally strong case for the private equity world dying off as you could for it surviving and growing as it did after the declines of the late 1980s and the early 2000s.

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