Blackstone co-founder Pete Peterson dies at age 91
Business executive also served as commerce secretary under President Richard Nixon
Pete Peterson, a billionaire business executive and public servant who co-founded Blackstone, the world’s largest private equity group, and campaigned relentlessly to reduce the national debt, has died in New York at age 91.
Born in Nebraska to Greek immigrants, Mr Peterson’s career alternated over the decades between business and politics. He served as marketing services director at the McCann Erickson advertising agency and as chief executive of Bell & Howell, a maker of movie equipment, before joining the administration of President Richard Nixon and eventually becoming commerce secretary.
But it was his role as the co-founder of Blackstone, a multi-asset manager with more than $380bn under management, that will be best remembered. After his government service, Mr Peterson joined Lehman Brothers, but left the investment bank with Stephen Schwarzman after a power struggle that pitted him against Lewis Glucksman, a legendary Wall Street trader.
In 1985, Peterson and Mr Schwarzman founded a firm that hinted at their names: petros is the Greek work for stone and schwarz means black in German. By various accounts the pair made an odd couple.
“Apart from the twenty-one-year gap in their ages, the six-foot Peterson towered over the five-foot-six Schwarzman, and Peterson’s dark Mediterranean colouring contrasted with Schwarzman’s fair complexion and baby blue eyes,” David Carey and John E. Morris wrote in King of Capital.
“While Peterson could be remote and preoccupied, Schwarzman was jaunty, down-to-earth, always engaged and taking the measure of those around him.”
According to the book, Peterson would shy away from confrontation while his co-founder was known for getting in “people’s faces when he needed to”. They also had different backgrounds, with Peterson growing up in a family with modest means and Schwarzman’s upbringing having been described as “comfortably middle class”.
Speaking to the FT, Mr Schwarzman described Mr Peterson as a “steadfast and an energetic and innovative strategist who helped the firm become what it is.”
He added: “I was very lucky that Pete was available as I was learning how to become chief executive. We disagreed on almost nothing which made it the ideal type of partnership.”
Mr Peterson became a billionaire following the listing of Blackstone in 2007, with his gains being reported at more $1bn, after taxes.
After retiring from Blackstone, he returned to the public policy arena, championing proposals to tackle the national debt — from cutting benefits of the rich to getting rid of mortgage deductions for the middle classes.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said: “Pete Peterson saw the dangers of a mounting national debt and took on a seemingly impossible cause that no one wanted to face. His leadership and wisdom made our nation stronger. He was simply the adult in the room — the conscience of our nation’s budget.”
Mr Peterson was born on June 5, 1926, the eldest of three children. In his early days he helped his father with the family diner, which operated around the clock.
He eventually made his way to the University of Chicago’s Graduate School of Business, where one of his mentors was Milton Friedman, an influential believer in the free-market economy.
Mr Peterson, who wrote several books including Steering Clear: How to Avoid a Debt Crisis and Secure our Economic Future, was married three times and is survived by five children and nine grandchildren.
With the founding of Blackstone he leaves behind a legacy as one of the leading architects of private equity, an asset class that has grown from a cottage industry to a massive multi-asset management industry.
For all his success in making money, Mr Peterson was not moved by wealth in the way his peers were. According to a banker quoted in King of Capital, for Mr Peterson “money didn’t matter”. It created distance between him and Mr Schwarzman.
“What eventually got to Pete was Steve’s lifestyle, his flashing his wealth, his drawing attention to himself,” the banker said in the book. “That’s not what Pete is about.”