Blackstone CEO Stephen A Schwarzman
2008 Rank: 2
2007 Rank: 1
Recent buyout fundraising: $34.5 billionThe man Fortune dubbed the "new king of Wall Street" in 2007, CEO Stephen A. Schwarzman, became the piñata of private equity by 2008.
Overpriced deals? Blackstone bought Hilton Hotels at the top of the market. Deals that don't look so smart? FGIC comes to mind. And yet the 1,200-person firm is managing conflicts among its diverse business lines with a finesse worthy of Goldman Sachs. it acquired leveraged-finance specialist GSO Capital, and it added three hedge funds to its roster.
Headwind issue: Sure, the IPO gave the firm the permanent capital necessary to weather market downturns, but this moolah comes at a price.
The shares have plunged 42% since the IPO: not fun for institutional investors--including Fidelity, Janus, Putnam, and the Chinese government--that bought at the top. Also, quarterly earnings announcements make the firm a lightning rod for the industry's woes in bad times and its excesses in good.
Worth noting: President Hamilton "Tony" James's twin passions--fly-fishing and dealmaking--crossed paths before he'd even turned 10 years old. At the yard sale where he bought his first rod, he talked the initial price of 25 cents down to a dime. His savings: 60%. His return on equity: priceless.
NEXT: Kohlberg Kravis Roberts
Source: Rankings are based on a firm's most recently raised buyout fund(s). Fortune looked at data from Capital IQ, institutional investors, and the companies themselves to determine the size of the most recently raised buyout funds. For some firms that means a fund that was raised in 2007; for others it might be 2006. Whatever the date, the most recent fund was the one we counted. In the case of companies that raise multiple funds simultaneously as opposed to raising a single fund at a time, we chose to count only those private equity funds that were not raised in public markets and that were earmarked for buyouts (as opposed to investments in debt, venture capital, or other ventures).