BlackRock vs. Blackstone
Print
Comment
Email
RSS
Twitter
Judgments: Opinions on the news.
BlackRock vs. Blackstone
How to tell the two financial firms apart.
By Duff McDonald
Posted Friday, June 19, 2009 - 11:25am
It's been quite the week for Larry Fink, chairman and CEO of BlackRock Inc. (BLK). Tuesday's $13.5 billion purchase of Barclay's Global Investors turned the New York money-management firm into the world's largest, with $2.1 trillion in assets under management. That's a long way to come in a relatively short 21 years. Fink has rightly been heralded as the newest member of Wall Street's power elite.
Yet it's safe to assume that a lot of people confuse BlackRock with private-equity firm Blackstone Group (BX). Funnily enough, Blackstone actually gave birth to BlackRock in 1988 and probably wishes it still owned the thing. After all, the last few years have been anything but kind to the once-celebrated Blackstone and its leader Stephen Schwarzman. The leverage buyout business is in the dumps, the overleveraged companies it owns are hemorrhaging cash, and Schwarzman's reputation and clout are nowhere near peak bubble levels. Today, BlackRock is worth eight times the value of Blackstone.
We live in curious times. Sure, paper might beat rock. But did you know that rock trumps stone?
| BlackROCK | BlackSTONE | |
| Origin | Founded within Blackstone in 1988 by former First Boston executives including Larry Fink. | Founded in 1985 by ex-Lehman Bros. executives Stephen Schwarzman and Pete Peterson. |
| Frontman | Larry Fink | Stephen A. Schwarzman |
| Style | Plodding | Flashy |
| Strength | No-nonsense asset gathering and (primarily) fixed-income investing. | High-profile buyouts fueled by cheap money—aka leverage. |
| Government Relations | Cooperative. Starting with a deal to manage some of Bear Stearns’ toxic assets, BlackRock has been involved in pretty much every crisis-related opportunity there is. | Combative. Fighting to maintain its ridiculously low tax rate on “carried interest,” Blackstone comes across as nothing more than a bunch of rapacious capitalists. |
| Seminal Moment | This week’s acquisition of BGI, which made BlackRock the largest asset manager in the world. | Schwarzman’s over-the-top 60th birthday party in Manhattan, a $3 million event widely considered the climax of the dumb-money era. Rod Stewart was paid $1 million for a half-hour performance. |
| Market Capitalization | $22.6 billion | $2.9 billion |
| One-Year Stock Price Performance (TICKER) | -16.0% (NYSE: BLK) | -38.2% (NYSE: BX) |
| Stock Holdings for the Frontman | Fink has $241 million in BlackRock stock. | Schwarzman has $2.6 billion in Blackstone stock. |
Comments