For years it’s been harder to get a job at Blackstone Group Inc. than to break into an Ivy League.
It’s only getting more competitive.
There are nearly twice as many young people applying for the firm’s analyst program than there were in 2015, when CEO Steve Schwarzman said it was six times harder to get a job at Blackstone than to get into Harvard, Yale or Stanford. With 29,000 applying this year, only 125 got in.
That means an acceptance rate of 0.7% has dropped to about 0.4%.
If you think Wall Street is at risk of getting out of vogue, the number of new analyst applicants at Goldman Sachs this year has more than doubled since 2018 around the world. That puts the concerns about competition for talent into perspective: Young people are still flocking to banks and private equity firms despite concerns abounding about work-life balance and long hours.
For Blackstone, the fresh young talent pool is just one part of the business that’s growing. President Jon Gray said headcount will rise by 20% this year. He cited his intent to expand in light of “significant inflows,” while Morgan Stanley’s analysts expect Blackstone’s assets to surpass $1 trillion by 2023.
Here’s Gray’s full interview with me for Bloomberg Television.
Blackstone’s market value this week surpassed Goldman Sachs for the first time in history, starting Friday at about $135 billion after a 73% surge in its stock this year. On whether this signals a changing of the guard on Wall Street, Gray denies a full shift in power. Rather, he points to how Blackstone invests and picks up clients.
“Goldman Sachs is an incredible firm -- in fact they were our adviser” on Blackstone’s most recent deal with AIG, he said. “We continue to broaden who we serve, how we serve them. We’re raising more and more of this perpetual capital, which creates more recurring fees. And we’re just growing rapidly.”
A Record Buyout Fund
Over at Carlyle, where the firm’s portfolio companies already employ about 1 million people worldwide, there’s a team pushing for the industry’s largest-ever buyout fund.
At $27 billion, Carlyle would raise a flagship fund surpassing the $26 billion vehicle Blackstone raised in 2019. As Bloomberg’s Sabrina Willmer and Heather Perlberg report:
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Private equity firms are gathering billions of dollars as demand for alternative assets surges among yield-hungry investors. This month, Hellman & Friedman raised $24.4 billion for its latest flagship fund, the firm’s biggest to date. Private equity funds took in $514 billion in the first half of this year, 70% more than the same period in 2020, according to data provider Preqin.
There’s always a reason to keep watching private equity for the long term. With valuations feeling toppy, investors are anxious about what returns for this vintage of funds across the industry may look like.
Much of the private equity industry is feeling the tailwind. Alternative asset managers have “the best business model in global financials with locked up AUM, minimal capital requirements or regulatory risk, high profit margins, enormous organic growth and robust distribution yields,” said Davide Serra, the founder of $20 billion fund manager Algebris Investments, which focuses on the finance industry.
“Perhaps the best value in the space now is Apollo, which benefits from much of the same tailwinds as Blackstone but is currently on sale due to temporary management issues and the perceived change in strategy,” Serra said of the firms’ stocks.
Wealthy Investors
Goldman put out its first-ever survey of 150 family offices. And with about a fifth of assets sitting in cash and fixed income, wealthy investors are ready to deploy more money. Some take-aways:
Meena Flynn, the global co-head of private wealth management, spoke to us in an exclusive television interview, which you can find here.
More in wealth: Investment banks are throwing cheap credit at their ultra-rich clients. Yachts and private jets have been especially popular buys, Bloomberg’s Devon Pendleton reports. Here’s exactly how attractive leverage can be.
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Have a great weekend. The weather is beautiful in New York tomorrow after a very strange swish of haze this week brought over from wildfires in California. Enjoy the sun, see you next week and remember to send your ideas, tips or opinions over at [email protected], any time.
