So, overall, the picture we see is of a reasonable economy, with some risks to the future, but I dont whatever recession we may have, I dont think is going to be really significant. View stories on our mobile app and tune into our weekly podcast. Thats a pretty good run. Ive been following that series . It was about $3 billion in total size. I havent gotten into the second season yet, and people said . I think that also theres a bunch of businesses that are manufacturing things that must exist in the physical world, you know, to cool or heat the environment, food, the distribution of essential medical products, whole energy transition. The oldest executive at Blackstone Inc is BrianMulroney, 81, who is the Independent Director of the General Partner. Meaning, your team, your group would be a Fortune Top 20 Company. BARATTA: Yeah, Im 29 when Im asked. Were seeing maybe wage increases beginning to decline. BARATTA: Steve Schwarzman, our co-founder and CEO and chairman and, you know, amazing mentor and great businessman. So warm sunshine, no interest? So, you know, the answer is we cant really get deals much bigger than, you know, $10 billion to $15 billion done on our own. Im not saying were clairvoyant and we handled everything perfectly. So taking advantage of the currency declining, a lower cost base in India, but revenues denominated in dollars or euros. BARATTA: Yeah. RITHOLTZ: Thats very interesting because we typically think of private equity as looking at these mature non-public companies. The first job for Morgan Stanley was McCown De Leeuw. And, yes, if Jerry needs some help, you know, he knows who to call. There was a big consolidation and lots of divestitures of pubs that were owned by brewers in the time, and there were rules came down that brewers can own distributors. You could consume Saturdays with kids running around. For information on our privacy practices see our Privacy Policy. We were much more networked. Baratta, who joined the firm in 1998, is also a member of the board of directors and serves on multiple management committees, as well as the firms investment committees. The transcript from this weeks, MiB: Joe Barratta, Blackstones Global Head of Private Equity, is below. I mean, you know, this is probably 2002. As of 1 April 2023 he still owns at least 1,145,448 units of Blackstone Inc stock. BARATTA: Patience. So Im watching the Cowboys like every Sunday. And then when the Niners got good, I became a contrarian and said, no, Im going to root for the Cowboys . And I think if you add it all up, we have about $40 billion of funds that were currently investing in their investment period. BARATTA: I mean, theres no question that financing costs are higher, both debt and equity, which is a healthy thing because I think the global cost of capital was too low, induced by super low rates and capital allocation to riskier assets, institutional investors chasing return. RITHOLTZ: And everybody started drinking and we looked at each other, can we have a drink that morning? RITHOLTZ: Lets talk a little bit about your career at Blackstone. RITHOLTZ: So before we let you go, were going to jump to our favorite questions that we ask all of our guests, starting with you mentioned streaming, tell us what youve been watching, what keeps the family entertained? RITHOLTZ: You know, were both sitting here , RITHOLTZ: Who wear ties? Privacy Policy I mean, his family dates back to like Louis Quatorze. The private equity firm has hired Droga5 Chief Strategy Officer Jonny Bauer as head of brand transformation for its portfolio group of more than 200 companies. He is also a member of the Board of Trustees of Georgetown University; is a trustee of the Tate Foundation; and serves on the board of Year Up, an organization focused on youth employment. Our final question, what do you know about the world of investing today you wish you knew back in the 90s when you were first getting started? Maybe theyre not run that efficiently. Blackstone has raised the largest-ever long-hold private equity vehicle as interest in the strategy from both investors and managers increases.. BARATTA: looking at the divestiture from Vivendi. You know, that did not happen when we were kids. We do think, at some level, it does affect the cost structures. BARATTA: Exactly. Commitments from new limited partners, along with significant re-ups from Fund I LPs, attest to "more interest in the concept" today relative to four years ago, Baratta said. RITHOLTZ: Lets talk about books. BARATTA: Its certainly investable for venture investors and smaller guys who are willing to sort of dig holes in the ground and hope something comes out. I mean, this is the ultimate French establishment. RITHOLTZ: across all these different inputs. BARATTA: I had agreed to go before September 11th happened. And today, were knocking on the door of 5,000. From Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life by Arthur C. Brooks. BARATTA: I think early on, it was important until we established ourselves, and then we did less of that. The whole dressing custom, yeah. BARATTA: Well, what brings me energy and joy in my job is investing capital and working with companies. Its a solution and source of a problem, sort of. As companies got larger and larger, it seemed like banks went upscale with them and left sort of a gaping void in the middle, where, you know, mid-market companies didnt have a merchant bank that could facilitate loans, credit, anything . So if your alternative, as a company, is to go public at a given price, youre probably not going to sell it to a private equity firm at a much lower price. BARATTA: That was very yeah, and you couldnt wear brown shoes. Thank you, Joe, for being so generous with your time. BARATTA: Exactly. So the second deal we did was we worked with another firm, a local U.K. firm called CVC and also TPG to buy Scottish & Newcastles pub divestiture. Fast. RITHOLTZ: Youre looking at the cost of capital and how much margin or leverage you want to assume. You get paid for the incremental risk that youre taking in a more leveraged capital structure. Late last year, a trio of engineers who had just helped Apple modernize its search technology began working on the type of technology underlying ChatGPT, the chatbot from OpenAI that has captivated the public since it launched last November. I think were 4,500 , BARATTA: or something like that. Our model is not to run the companies. RITHOLTZ: What about geographies? The whole aesthetic of it is amazing. Terms and Conditions. Privacy Policy Were hiring summer interns now who are 19 and 20 years old. RITHOLTZ: based on whats going on. So we kind of went on, did some missionary work, meeting the local private equity firms in France and, of course, in the U.K., in Germany, up in the Nordic region, in Italy, and we just met all the other players. But, in financing acquisitions and capital needs of these middle market companies, the private credit market has played an important role in that. I mean, were not specifically investing in charging stations. So when youre adjusting your investment posture, youre basically saying were going to take more risk or less risk . RITHOLTZ: So you end up at Blackstone in 1998, at a time when public equity prices became a little unmoored and were on the way up to a real bubble. Talk about linear TV , BARATTA: there were two games, one at 10:00, one at 1:00, and the Cowboys playing in the NFC East. BARATTA: Well, I would say in my 25-year history at Blackstone, there were certain industries that were growth industries that we were investing in in the mid 90s and late 90s and early 2000s, that now are no longer investable. And its cool and, you know, Bitcoin or whatever, theyre just probably a real store of value. BARATTA: Its a real thing in Europe. You could only wear black shoes. I think a big chunk of what we do over our history has been taking companies private and doing corporate carve-outs from public company, so non-core assets that a large company is divesting, family-owned businesses. But youre not wrong, I mean, theres different names within the individual businesses, but we all work at Blackstone. But it is looking at whats more attractive and whats less attractive. So we have to work with our investors, our limited partners, other private equity firms to assemble a deal that gets much more than $10 billion of enterprise value. I mean, you have a bunch of companies that have trillion dollar-plus market caps. You can stream and download our full conversation, including any podcast extras, iTunes, Spotify, YouTube, Stitcher, Google, Bloomberg, and Omny. Joseph Baratta. BARATTA: Well, yeah, the private credit market I think is really attractive, and its actually been around a long time. I was supposed to go over you know, in November, I ended up doing that. Of course, I mean, France, Germany, Italy, Spain, you know, the whole Nordic region, Sweden, theyre not . Just like life gets in the way and I had, you know, a cool career going and I stuck with it. But I love the announcement when you were promoted to Global Head of PE from Blackstone, they said the 73 investments and pending deals youre involved, and combined for $117 billion in revenue, the equivalent of the 13th largest company by revenue on the Fortune 500 list. You end up in London. BARATTA: Yes. When I came to the city, I was like, wow, this place is amazing. You know, bigger technology companies, software businesses that have proven theyve got really durable sticky revenue models. We all wanted to get there fast, but I think its entered a new level. Joseph Baratta is the Global Head of Private Equity and a member of Blackstone's Board of Directors. BARATTA: You know, the book I most recently finished, by Arthur Brooks, a book on happiness. Those do seem to be valued relatively more attractively. All of our earlier podcasts on your favorite pod hosts can be found here. And so, Im proud of how we navigated that cycle, and I think were in a more normal world. Those two men really were extremely important in my professional development, my personal development, great, amazing mentors. RITHOLTZ: So heres the really interesting observation that youre making, Blackstone has boots on the ground in all these different sectors. BARATTA: And, you know, philanthropy in the U.K. is at a different scale than in the U.S. "The current volatile and unpredictable environment reinforces . BARATTA: I mean, with all respect to the Joneses who run that team, you know . So thats the type of thing that a decade ago, we wouldnt have invested in. I mean, at least, it was back then. You know, we bought Hilton in June of 2007. I have my way. Blackstone's global head of private equity, Joseph Baratta is in contract to pick up a sweet 6-story townhouse from music mogul Lyor Cohen (he's Tory Burch's boyfriend), the NY Post reports.. Financial Advisors, visit our dedicated website to learn how you can partner with Blackstone. Not to say like we executed on that vision perfectly, I mean, we would have made some mistakes, but we definitely became much more cautious when the bull market really ramped up, in particular, post COVID, when not only did you have the low rates which the Fed double down on, you had this huge transfer payment from the federal government . BARATTA: into peoples pocketbooks, which massively accelerated the economy and rates stayed low. To receive email alerts from Blackstone, sign up below. BARATTA: And then, of course and now, look, theyre fun to watch. Joseph Baratta is 46, he's been the Global Head of Private Equity and Director of the Company of Blackstone Inc since 2020. Follow me on Twitter @ritholtz. And weve become better at what we do in buying control of companies, engaging with them, making them better, helping them grow. BARATTA: And I think they nailed it. Were coming off of a period of low inflation, low rates, and suddenly we have higher inflation and rising rates. RITHOLTZ: And you had mentioned private credit before, that seems to have been a giant growth area, especially when rates were at zero, when people arent seeing a whole lot of returns from fixed income. And so for the last maybe, I dont know, 12 or so years, Ive been involved with the Tate Foundation. We hired an Italian for the firm, Andrea Valeri. And then at Blackstone, you know, Steve Schwarzman changed my life; and Tony James, who when I was about four years into Blackstone, really helped transform the firm and make it what it is today. So we were working with our real estate guys in health care facilities, and visitor attractions, and theme parks. Blackstone (NYSE:BX) today announced that Joe Baratta, the firm's Global Head of Private Equity, will join its board of directors. And I was like, geez, okay, well . I mean, I knew nothing about finance. And I think, largely, you want to avoid highly regulated industries, where youre relying on the government to do something. RITHOLTZ: I can imagine. and Merlin Entertainments Group. BARATTA: you know, company-based. BARATTA: Yeah. This net worth estimate does not reflect any other assets that Mr. Baratta may own. But, in general, we became much more risk averse, risk-off in that, you know, mid 2021 period. Bloomberg Daybreak Europe, anchored live from London, tracks breaking news in Europe and around the world. And so I didnt know, you know, what finance was all about. Theres a little more friction in those types of industries. The Tate is such a significant cultural institution in the U.K. Its funded largely by the state.
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