Peter G. Peterson, Blackstone's Co-Founder, Dies at 91
Glucksman, who died in 2006, told Auletta: “Pete was a guy totally obsessed with the world hearing the name Pete Peterson.”
Firm’s ‘Rudder’
Peterson, according to Auletta, “rightly believed it was he who set the strategic framework for the firm’s success and who acted as rudder for Glucksman, an opinion shared by many partners.”
Glucksman’s short, unhappy tenure as sole CEO ended with the 1984 sale of Lehman for about $375 million to Shearson/American Express Inc. What could have been merely a moral victory for Peterson was also a windfall, since he had insisted in his departure agreement that he would receive a portion of the proceeds if Lehman were sold within three years.
More importantly, leaving Lehman freed Peterson to focus on what interested him most, owning and running companies.
“I had a few million dollars, but that’s all I had at the time,” he told Rose. “How could I have imagined that little Blackstone, with four people, could have developed into what it did?”
Starting Blackstone
He and Schwarzman, who had collaborated on deals at Lehman, created Blackstone in 1985 by each writing a check for $200,000. Peterson, then 59, became chairman. Schwarzman, then 38, became CEO. Roger Altman, who would later serve in the Treasury Department under President Bill Clinton, filled out the management committee as vice chairman.
Blackstone swiftly became a leader in mergers and acquisitions involving U.S. and Japanese companies, guiding Sony Corp.’s purchases of CBS Records Inc. and Columbia Pictures and advising Firestone Tire & Rubber Co. in its acquisition by Bridgestone Corp.
Peterson and Schwarzman raised $840 million for a private-equity fund, Blackstone Capital Partners. The fixed-income investment group they created was bought by PNC Bank Corp. in 1994 and is now BlackRock Inc., the world’s biggest money manager.
The Schwarzman-Peterson partnership was strained by the lavish 60th birthday party Schwarzman threw for himself in February 2007, just months before Blackstone’s initial public offering. The party for 500, with entertainment by Rod Stewart, fueled the movement in Congress to raise taxes on executives at private-equity and venture-capital firms.
“Today, I am sorry to say that when people think about Steve, the 60th birthday party often detracts from his many accomplishments,” Peterson wrote in his 2009 memoir.
IPO Windfall
Blackstone’s IPO in June 2007 brought Peterson $1.85 billion, before taxes. He retired at the end of 2008 and put much of his money and time into the Peter G. Peterson Foundation, which advocates reducing budget deficits, curtailing federal entitlement programs and reducing dependence on oil.
“When it comes to the long-term fiscal and economic future, U.S. leaders are mute not only on domestic challenges but on global challenges too,” he wrote in his 2004 book, “Running on Empty.”
Peter George Peterson was born on June 5, 1926, in Kearney, Nebraska, a product of what he called that state’s “small and highly interwoven” Greek community.
Great Depression
His father, George Peterson -- born Georgios Petropoulos in Greece -- came to the U.S. at 17 and, in 1923, opened a 24-hour restaurant near Kearney’s railroad station. He married Venetia Papapavlou, another emigre from Greece.
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