Insider Today: Blackstone hits $1 trillion

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July 21, 2023

Happy Friday! Sharks and water that feels like syrup. That’s apparently what you can look forward to if you’re headed to South Florida beaches this weekend.

Back in New York, things are a bit rosier for one Wall Street firm that hit a huge milestone.

In today’s edition:

Google is pitching an AI tool to media companies that can write news stories.
Layoffs are starting to quietly hit the adtech industry.
Don’t make this mistake on your résumé.

But first, we’ve got a whole lot of zeros.

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THE BIG STORY

Blackstone hits the big T

Blackstone CEO, chairman, and cofounder Stephen Schwarzman. Hollis Johnson/Business Insider

Welcome to the four-comma club, Blackstone.

The firm has reached rarified air, as it now manages more than $1 trillion in assets.

The achievement, announced in its second-quarter earnings report, is impressive in and of itself. But Blackstone has the added bonus of being the first private-equity firm to reach the milestone.

While giant asset managers like BlackRock and Vanguard surpassed the mark long ago, their approach to amassing assets relies heavily on building massive ETF businesses and courting 401(k) plans. As an alternative investment firm, Blackstone’s path to $1 trillion has been, well, alternative.

With a mix of real estate, private credit, wealth, and growth investments, the firm has done a little bit of everything to get to $1 trillion.

Sure, Blackstone benefited from a low-rate environment over the years that made the firm’s offerings more attractive to investors looking for higher returns.

But that all flipped when rates spiked over the past year, complicating many of Blackstone’s strategies.

Real estate, in particular, faced challenges as investors started pulling money in waves from one of its funds. And things don’t appear to be getting easier, as a recent Wells Fargo note predicted more pain for both residential and commercial sectors.

But Blackstone’s chief financial officer, Michael Chae, was quick to point out on the earnings call that half of the firm’s owned real estate was in logistics, student housing, and data centers, areas he said were performing well.

Besides, nothing could dampen Stephen Schwarzman’s mood. Blackstone’s chairman, CEO, and cofounder was happy to reminisce about how far the firm has come since launching in 1985 with $400,000 in startup capital.

The billionaire called the $1 trillion achievement “significant in many ways, including for me personally,” and added that he felt “an immense sense of pride” in where the firm had come, according to a transcript of the call provided by AlphaSense.

Schwarzman, who is 76, has the added benefit of having a clear succession plan in place. Unlike some of his Wall Street peers, Jon Gray, the firm’s president and COO, is waiting in the wings.

In fact, perhaps things have gotten too good at Blackstone for Schwarzman.

He highlighted how competitive the firm had been at recruiting, noting this year’s selection rate for its 169 first-year analyst positions was less than 0.3%.

“I doubt I'd be able to be hired today,” he said, before adding, “not sure that's a great thing.”

READ ON

TOP READS

Google, Adtech, & résumé tips

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The Google Doc diaries of Caroline Ellison, a key figure in the FTX saga. The former co-CEO of the trading firm Alameda Research wrote candidly about feeling out of her depth in her role. Plus, Ellison expressed her complex feelings about working with her ex Sam Bankman-Fried.
Quiet layoffs are still plaguing adtech. Layoffs never really stopped within adtech. On top of job cuts during the mass tech layoffs earlier this year, companies including Outbrain and Brightcove have slashed additional employees. But it’s not all bleak — some companies are now hiring again.
Google pitched its AI tool for journalists to The New York Times and others. The tool — called Genesis — can write news articles. And people who saw it said they found the AI unsettling. Plus, some said Google’s presentation lacked an understanding of what goes into producing accurate news stories.
Buying any EV besides a Tesla doesn’t make sense right now. Many car companies — and EV charging companies — are switching to Tesla’s charging technology within the next few years. So buying any EV besides a Tesla means you’re buying technology that is promised to become outdated.
Get ready to pay for groceries with your palm at Whole Foods. Amazon plans to install the palm-scanning technology at every Whole Foods location in the US by the end of 2023. Customers who use this method will even get discounts. But privacy advocates are worried about how Amazon is collecting and storing people’s palm data.
Ex-Google recruiter says “text bricks” on résumé = “zero chance” of moving forward. Nolan Church, who worked as a Google recruiter for years, identified being concise as an important skill. He recommended using tools like ChatGPT and Grammarly to tighten up résumés.
Elon Musk sounds off. The Tesla CEO discussed topics as varied as Warren Buffett, cyborgs, and “Game of Thrones” during the company's earnings calls. Here are 12 of his best quotes. Just don’t ask him about the economy because he doesn’t “know what the hell is going on.”

BEFORE THE OPENING BELL

Dow, deflation, & dividend stocks

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The Dow keeps climbing. The blue-chip index has posted a nine-day win streak. But the tech-focused Nasdaq 100 closed down 2% thanks to Netflix and Tesla.
The dark side of falling inflation. A drop in inflation has been viewed as a big win for the markets. But there is too much of a good thing, as the risk of deflation looms.
It could pay to invest in these stocks. Morningstar’s David Harrell says 10 dividend-paying stocks including Verizon and Pfizer are worth considering.

WHAT ELSE IS GOING ON

World Cup, airplane etiquette, & Robinhood cuts

Julien Mattia/NurPhoto via Getty Images

The US Women’s National Team begins its World Cup title defense tonight. These are the 14 superstars in the tournament.
Yay or nay: Shorts on an airline. The debate has taken the internet by storm.
Leaked audio reveals Robinhood’s cuts last month were deeper than previously thought. It comes as the company’s head of engineering became the latest tech leader to leave Robinhood.

LAST LOOK

Celebrity weddings

Elvis Presley and his bride, Priscilla Ann Beaulieu. Bettmann/Getty Images

From Elizabeth Taylor and Richard Burton to Frank Sinatra and Mia Farrow, 25 vintage photos of iconic celebrity weddings.

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