This Is One Incredible CEO

The Motley Fool's readers have spoken, and I have heeded your cries. After months of pointing out CEO gaffes and faux pas, I've decided to make it a weekly tradition to also point out corporate leaders who are putting the interests of shareholders and the public first and are generally deserving of praise from investors. For reference, here's my previous selection.

This week, I'd like to highlight the mother of all private-equity firms, Blackstone Group (NYSE: BX  ) and its CEO, Steve Schwarzman.

Kudos to you, Mr. Schwarzman
As you might imagine, companies like Blackstone Group that invest in and buy out businesses, as well as run hedge funds and invest in commercial real estate markets, require a stable economy and interest rate environment in order to be successful. The recession in 2009 practically turned this sector on its head. Commercial real estate markets are only now beginning to recover with wealthier investors only recently began returning their money back into the hands of asset managers like Blackstone.

This isn't to say, even with the economy on the mend, that the asset management sector hasn't struggled mightily. In order to attract new money, KKR (NYSE: KKR  )  and Blackstone -- both companies known to attract the upper echelon of wage-earners, have lowered their minimum buy-in requirements for their hedge funds down to just $2,500. Even Carlyle Group (NASDAQ: CG  ) , which had previously restricted access to the top 1% of all income earners, is lowering its minimum investing requirements a bit to attract new investors as my Foolish colleague Amanda Alix reported in March. 

However, Blackstone, which has an astounding $218.2 billion in assets under management, has been able to exploit numerous opportunities, as well as throw its weight around, to turn profits for its company and investors and stand out among its peers. Over the past 12 months, the company has boosted its gross inflows by $34 billion, of which $31 billion was organic. Furthermore, its distributable earnings -- which can vary from quarter to quarter with P/E firms -- jumped 134% to $0.33 per unit.

One of the biggest boosts in its most recent quarter came from Blackstone's private-equity portfolio which saw economic income rise 15% from the previous year. More importantly, it saw the IPO of theme park owner SeaWorld Entertainment (NYSE: SEAS  ) , allowing Blackstone to sell 16 million shares and generate another "whale" of a return for investors.

But, just as Blackstone's Steve Schwarzman has been heralded for finding great deals and delivering big returns to shareholders, he should be praised for knowing when to walk away as well. Earlier this year, for instance, Blackstone made a $15 per share bid to acquire a majority stake in Dell (UNKNOWN: DELL.DL  ) as a competing bid to Silver Lake Partners and CEO Michael Dell's $13.65 per share cash bid. Blackstone wisely walked away from its bid after an IDC report noted that PC sales fell 14% in the first quarter and the PC business was deteriorating faster than anyone had first imagined because of smartphones and tablets.

Knowing when to hold 'em, and when to fold 'em, has made Schwarzman a fantastic businessman.

A step above his peers
I could probably end right there and it would be more than sufficient as to describe why Steve Schwarzman is an incredible leader, but there's actually so much more!

Obviously, shareholders are going to benefit in a big way from the high profit margins associated with Blackstone's operations. With few staff and overhead needed to run hedge funds and orchestrate buyouts, much of what Blackstone generates is almost pure profit. That means it doesn't take a home run every time to yield a solid dividend. Over just the past four quarters, shareholders in Blackstone have received $0.92 in payouts. That's good enough for a 4% yield based on yesterday's close and would be just about double what you'd be earning on a 10-year Treasury note.

Blackstone's employees also benefit in a big way as well. In terms of compensation -- because Blackstone is so picky in its hiring process to gain employees who'll stay with the company over the long term -- it's the cream of the crop. In 2010, for instance, Blackstone set aside about $811,000 per employee for compensation. Furthermore, Blackstone has increased its headcount by about 25% since the recession, proving high-level jobs do still exist. 

But, my personal favorite aspect of Blackstone Group and its CEO Steve Schwarzman is that he hasn't allowed some $212 billion in assets under management to go to his head. In April, Schwarzman donated $100 million (not a typo!) to the Tsinghua University in Beijing, China. The reasoning behind Schwarzman's donation was to create an elite level Master's program for 200 Chinese students as well as others around the world. Schwarzman's goal, with China playing such a large role in the world's global evolution, is to ensure that China and its top minds don't get left behind.

Two thumbs up
Private equity firms like Blackstone are certainly known for their ruthless cunning when it comes to investing and are often associated with posh lifestyles and spending. Contrary to this belief is Blackstone's Steve Schwarzman, who has done a good job of creating wealth for shareholders, makes sure his employees are fully qualified and compensated well for their hard work, and is a huge philanthropist in the educational field. It's not easy to trust a private-equity firm that offers no guarantee of future income, but as long as Schwarzman is at the helm of Blackstone, it will always have my vote of confidence.

With so much of the financial industry getting bad press these days, it may be a greedy when others are fearful moment. Not surprisingly, some of Warren Buffett's biggest investments are in the space. In the Motley Fool's free report, "The Stocks Only the Smartest Investors Are Buying," you can learn about a small, under-the-radar bank that's too tiny for Buffett's billions. Too bad, because it has better operating metrics than his favorites. Just click here to keep reading.


Read/Post Comments (4) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 29, 2013, at 2:14 PM, justpicky01 wrote:

    He will never donate as much as Bill Gates has ....

    Everybody knows how "blackstones " rips people off ......

  • Report this Comment On June 03, 2013, at 10:34 AM, abeeman924 wrote:

    The same guy that compared Obama to Hitler because he wanted to raise taxes on private equity?.....yes, an incredible person

  • Report this Comment On June 05, 2013, at 11:45 PM, wayoutie wrote:

    Please have patience, many will gain ;

    and pass it on to another visionary.

    copyright

    I want this to belong to the whole word. You are a part of the whole world.

    In the long term, wiki-create-all-world-net, is at the forefront of a technological revolution that has the potential to be as important and disruptive as the development of the personal computer.

    The awesome potential of wiki-create-all-world-net technology makes this forward-thinking innovator a highly attractive game changer.

    WIKI-CREATE-ALL WORLD-NET

    Right up front.

    I do not want your money. I just want your visionary energy

    The real game changer beyond 3D

    I just want you to read this with some of the vision we were all born with, INCLUDE YOUR BRIGHT ASSOCIATES.

    PREAMBLE

    Most every one has a great idea or invention which may be a mile long, but they only have the knowledge of a half inch volume long of how to create it. With the internet wrapped around the world, such should be able to send us a hundred years ahead. WIKI-CREATE-ALL is heading that way in their fields.

    I know you are a busy person, but scan this. I need about two thousand volunteers. This should be 10 times as big as Wikipedia and operate in the same fashion within no time, but very, very different.

    Everything in the future should belong to mankind, no need to wait 300 years.

    Move two thousand years ahead in one year it is all done with technology.

    Plus

    Free world ENERGY, WATER, OR ANYTHING ELSE

    The brain is based upon:

    The galaxy and universe is based upon billions of stars, planets, black holes, comets and other fillers. This takes up about twenty six percent of all space. The other eighty four percent is made up of dark material. We do not know what is in the dark area, except maybe light and magnetism and gravity, but we are not sure of that.

    The brain is a miniature copy of this universe with billions of connectors to memory spots. These are somehow connected to each other. The rest is filed up with galleries and dark space like the universe is dark space, which is unknown space.

    Now we have a quick view of the universe and a quick view of the brain. I would like to view the internet as quite similar, only it circles the world with millions of connections of live intelligent people and connecting at these bright active spots, not just numbers. The purpose of this explanation and comparison is power of this world brain called the internet. It should be able to solve any problem existing or created, and not take a million years to do so.

    We need to set up world sites that could reach all creative minds and have a space for them to put their ideas or part ideas down as a response to the creation of “WORLD FREE ENERGY AND EVERYTHING ELSE." Since this is such a great forum we would not want to limit it to any narrow subject. There would be no advertising to clutter up great brains with great ideas on these sights.

    Man only has part ideas and imagination, then you circle them around the world in all directions and all languages, you now have a thousand years of knowledge in a few hours.

    I know, I tried it a few years ago and got massive response, but did not sell advertising so ran out of money. This time around it needs to be done with volunteers and later from donations by people and companies it has helped by revolutionize their doings.

    I need to raise hundreds of volunteers and accumulate several thousand volunteers from all parts of the world and from every type of language and expertise. As this creates what now can be a world brain with endless power and results.

    What ever, (we, or machine can conceive,) man can achieve without waiting a thousand years or so.

    The other one is,"man can achieve any thing he can conceive." Including free energy.

    The universe, has billions upon billions of bodies, connected by at least gravity and 86% dark material.

    Nothing new, the brain reflects the universe, it is a copy. Now the internet spans the world with millions of connections. The brain power is endless. connecting all this brain power to each other. Man or machine can create anything they can conceive including free energy with the global internet..

    This can be created on the world internet similar to the massive model of Wikipedia.

    Ideas breed ideas. A man has a mule pull with a load made up of a single cylinder gas engine, held down by a conveyor chain. The mules become stubborn and balked the man along has an idea. Bolt the motor down, Put the chain from the motor to the wheel and do away with the donkeys. Bend the tong back to steer. The ideas reproduced, we will call it a truck. The ideas had a reproduction encounter, maybe called. These were a few people with a few ideas. Great ideas come from one part idea and the rest is usually made up of a dream, it may take dozens with partial ideas to fill inn the rest of the parts.

    This and much greater things should not have taken 2,000 years, but it did and will not take very long to do much greater things beyond our imagination once this network is in operation.

    Your real in debt visionary.

    I have learned from my past experiences with WIKI-CREATE-All-WORLD-NET that we synthetic many metals and attempt all types of energy and do every type of trying to separate salt from water. What we should do is with nano technology and other great methods expend our energy and work on creating synthetic water.

    Time travel! I did not include this in the text earlier because such a far fetched thought may run you off, but it could be \done with the combination of enough time and accumulated brain effort.

    They build hugh computers any more as big as some warehouses, the problem remains, they deal with numbers conceived and not visions and ideas from the mind of millions of thinking and visionary thinking minds around the world. What resources.

    I am open to your and your associates thoughts.

    William D. Stott

    willwillscott@hotmail.com

  • Report this Comment On June 05, 2013, at 11:49 PM, wayoutie wrote:

    copyright

    I want this to belong to the whole word. You are a part of the whole world.

    In the long term, wiki-create-all-worldnet, is at the forefront of a technological revolution that has the potential to be as important and disruptive as the development of the personal computer.

    The awesome potential of wiki-create-all-worldnet technology makes this forward-thinking innovator a highly attractive game changer.

    WIKI-CREATE-ALL WORLDNET

    Right up front.

    I do not want your money. I just want your visionary energy

    The real game changer beyound 3D

    I just want you to read this with some of the vision we were all born with, INCLUDE YOUR BRIGHT ASSOCIATES.

    PREAMBLE

    Most every one has a great idea or invention which may be a mile long, but they only have the knowledge of a half inch volume long of how to create it. With the internet wrapped around the world, such should be able to send us a hundred years ahead. WIKI-CREATE-ALL is heading that way in their fields.

    I know you are a busy person, but scan this. I need about two thousand volunteers. This should be 10 times as big as Wikipedia and operate in the same fashion within no time, but very, very different.

    Everything in the future should belong to mankind, no need to wait 300 years.

    Move two thousand years ahead in one year it is all done with technology.

    Plus

    Free world ENERGY, WATER, OR ANYTHING ELSE

    The brain is based upon:

    The galaxy and universe is based upon billions of stars, planets, black holes, comets and other fillers. This takes up about twenty six percent of all space. The other eighty four percent is made up of dark material. We do not know what is in the dark area, except maybe light and magnetism and gravity, but we are not sure of that.

    The brain is a miniature copy of this universe with billions of connectors to memory spots. These are somehow connected to each other. The rest is filed up with galleries and dark space like the universe is dark space, which is unknown space.

    Now we have a quick view of the universe and a quick view of the brain. I would like to view the internet as quite similar, only it circles the world with millions of connections of live intelligent people and connecting at these bright active spots, not just numbers. The purpose of this explanation and comparison is power of this world brain called the internet. It should be able to solve any problem existing or created, and not take a million years to do so.

    We need to set up world sites that could reach all creative minds and have a space for them to put their ideas or part ideas down as a response to the creation of “WORLD FREE ENERGY AND EVERYTHING ELSE." Since this is such a great forum we would not want to limit it to any narrow subject. There would be no advertising to clutter up great brains with great ideas on these sights.

    Man only has part ideas and imagination, then you circle them around the world in all directions and all languages, you now have a thousand years of knowledge in a few hours.

    I know, I tried it a few years ago and got massive response, but did not sell advertising so ran out of money. This time around it needs to be done with volunteers and later from donations by people and companies it has helped by revolutionize their doings.

    I need to raise hundreds of volunteers and accumulate several thousand volunteers from all parts of the world and from every type of language and expertise. As this creates what now can be a world brain with endless power and results.

    What ever, (we, or machine can conceive,) man can achieve without waiting a thousand years or so.

    The other one is,"man can achieve any thing he can conceive." Including free energy.

    The universe, has billions upon billions of bodies, connected by at least gravity and 86% dark material.

    Nothing new, the brain reflects the universe, it is a copy. Now the internet spans the world with millions of connections. The brain power is endless. connecting all this brain power to each other. Man or machine can create anything they can conceive including free energy with the global internet..

    This can be created on the world internet similar to the massive model of Wikipedia.

    Ideas breed ideas. A man has a mule pull with a load made up of a single cylinder gas engine, held down by a conveyor chain. The mules become stubborn and balked the man along has an idea. Bolt the motor down, Put the chain from the motor to the wheel and do away with the donkeys. Bend the tong back to steer. The ideas reproduced, we will call it a truck. The ideas had a reproduction encounter, maybe called. These were a few people with a few ideas. Great ideas come from one part idea and the rest is usually made up of a dream, it may take dozens with partial ideas to fill inn the rest of the parts.

    This and much greater things should not have taken 2,000 years, but it did and will not take very long to do much greater things beyond our imagination once this network is in operation.

    Your real in debth visionary.

    I have learned from my past experiences with WIKI-CREATE-All-WORLDNET that we synthetic many metals and attempt all types of energy and do every type of trying to separate salt from water. What we should do is with nan o technology and other great methods expend our energy and work on creating synthetic water.

    Time travel! I did not include this in the text earlier because such a far fetched thought may run you off, but it could be \done with the combination of enough time and acumulated brain effort.

    They build hugh computers any more as big as some warehouses, the problem remains, they deal with numbers concieved and not visions and ideas from the mind of millions of thinking and visionarial thinking minds around the wortld. What resources.

    I am open to your and your associates thoughts.

    William D. Stott

    willwillscott@hotmail.com

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