At Blackstone, big IPO payday
The private-equity firm's two founders could together get $2.33 billion.
Stephen Schwarzman and Peter G. Peterson, who started the Blackstone Group L.P. two decades ago with $400,000, stand to collect a combined $2.33 billion from the largest initial public offering by a private-equity firm.
Schwarzman, 60, the firm's chief executive officer, will receive $449.2 million for selling some of his holdings, leaving him with a 24 percent stake, New York-based Blackstone said yesterday in a filing with the Securities and Exchange Commission.
Peterson, 80, who is scheduled to retire next year as chairman, will get $1.88 billion and retain 4 percent of the company, which buys other companies.
Blackstone, manager of the world's second-largest buyout fund, plans to go public as soon as this month after investing $199 billion in companies since it was founded in 1985.
The payouts to Schwarzman and Peterson top those earned by partners at the Goldman Sachs Group Inc. and the founders of Google Inc. when their companies went public.
After the public stock sale, Blackstone will have a market value of $32.4 billion: 12.3 percent of the shares will be held by the public, and China's state investment company will have a 9.7 percent stake in a private transaction.
Schwarzman's remaining holdings in Blackstone will be valued at $7.73 billion if the shares sell for $30 apiece in the IPO, according to the filing. Peterson's remaining shares would be worth $1.31 billion.
Schwarzman made $398.3 million last year, according to the filing. Peterson earned $212.9 million.
Blackstone said in the filing that the executives' compensation was based on their ownership stakes and the firm's fees and profits from its buyout, real estate and investment funds.
In Goldman's 1999 IPO, partners of the New York-based investment bank took home stock then valued at $63.6 million, with senior executives receiving as much as three times that amount. Google founders Sergey Brin and Larry Page each sold about $41 million of shares when the Mountain View, Calif.-based Internet-search company went public in 2004. They kept stock worth $3.2 billion.