Stephen Schwarzman is so clever that you’d easily mistake his success for good fortune. Mr. Schwarzman was one of Wall Street’s rising mergers-and-acquisitions stars when he and former Commerce Secretary Pete Peterson started Blackstone Group, the private equity firm, in 1985. Blackstone became a leading adviser for takeovers and buyouts, eventually moving into corporate restructuring, real estate, credit and hedge fund investments all over the world. With his success, Mr. Schwarzman became one of New York’s leading philanthropists. He is a trustee of the New York Public Library, to which he donated $100 million. He and his wife send hundreds of children in New York to parochial schools each year.
Nevertheless, Mr. Schwarzman dared critics to make him the bad guy. He bought the world’s coolest apartment building—the triplex originally designed for and inhabited by J.D. Rockefeller at 740 Park Avenue—for more than $30 million. For his 60th birthday party in 2007, he had the Park Avenue Armory transformed into a replica of his apartment, but bigger. Rod Stewart sang a medley, for a reported $1 million.
Mr. Schwarzman took a lot of criticism for the celebration, which happened at the beginning of Wall Street’s mortgage securities crisis. James Stewart’s profile in The New Yorker was subtitled “How Stephen Schwarzman Became Private Equity’s Designated Villain.” Mr. Schwartzman, however, made an escape worthy of Houdini. Even though Blackstone had become a huge real estate power, its mortgage-backed securities business and holdings were in commercial properties. Private equity got a pass. Mr. Schwarzman may have flown a little too close to the sun, but he was too smart to singe his wings. Then again, he has always been crafty. The signature Schwarzman story from Yale—he was in the class after George W. Bush—is that he founded a ballet society to meet girls.