Private Equity’s `Miserable’ Defense

Photograph by Peter Foley/Bloomberg

Stephen Schwarzman, chairman and chief executive officer of Blackstone Group LP.

In a year when political ads attacking private equity are becoming the norm, the chief of the world’s largest buyout firm has some blunt words for his peers.

“I think the industry has done a miserable job of marketing,” Blackstone Chairman Steve Schwarzman said in an interview this morning on CNBC. “The reason that the industry hasn’t communicated this message is somewhat of a mystery to me.”

The 65-year-old Blackstone co-founder is backing Republican Mitt Romney for the White House, having raised money for the former Bain Capital chief at a Park Avenue fundraiser in December. Schwarzman’s partner, Blackstone President Tony James, is supporting President Barack Obama’s re-election .

Schwarzman said he thinks some Obama supporters misunderstand the buyout industry because not all private-equity investments are successful. “And by the way, in the real world not every company is successful,” he said.

“It’s frustrating if you believe the facts as I know them,” he added.

Schwarzman, sitting next to House Majority Leader Eric Cantor of Virginia, also weighed in on the country’s mounting debt and the impending “fiscal cliff”’ — the year-end’s convergence of Bush-era tax cuts expiring and automatic spending cuts taking effect if Congress does not act on deficit reduction.

“If you keep doing this, something terrible is going to happen,” Schwarzman said of continuing to spend more than the U.S. rakes in. “This is completely unsustainable. Something terrible will happen to us.”

Blackstone oversees about $190 billion in assets across private equity, hedge funds, real estate and credit.


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