Who is The King of Capital?

M Friedman's picture
Rank: King Kong | 1,073

Not Henry Kravis, no, not David Rubenstein either, but actually, Steve Schwarzman is the King of Capital.

So, why does Blackstone's founder get the ostentatious title of being the King of Capital? Well, plainly, because he just is the exact Master of the Universe that we would all expect him to be. Now, this is where I encourage anyone with a mild interest in the private equity industry to read John Morris' and David Carey's King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone.

I refuse to ruin the plot line of any good book, but I probably should say more about how the book reads and its contents. For starters, although the book chronicles Schwarzman's story to a large extent, the plot is more a decent history of the buyout industry vicariously lived through Blackstone's ups and downs.

In my humble opinion, the authors take on the private equity industry is much more bipartisan than Barbarians at The Gates. Towards the end of the book, the story actually transitions away from Blackstone and begins to defend private equity as a important capital and consultancy source to our global economy.

If more people would spend the time to read about the industry through Morris' and Carey's words, they might feel a little dumb for thinking Mitt Romney was anything close to a corporate raiding, job killer. While this book may only make you giggle a handful of times, it is a truly informative account of where private equity firms came from and where they might be headed. So what are you waiting for? Go to Amazon and order a copy, right now.

Does anyone else have an opinion on King of Capital's account of the private equity industry or Blackstone?

Comments (14)

Apr 10, 2012

It will be the next book I read, thanks.

Apr 10, 2012

I agree with your recommendation. The book really does a great job of going beyond Blackstone's story to share the overall history of private equity and LBO financing. When they do focus on Blackstone, it's the interesting stuff (the drama of a specific deal, the politics during the firm's growth, the homeruns and the bad childs, etc.).

Apr 10, 2012

Next on my reading list after Ahead of the Curve.

Apr 10, 2012

Decent book. Don't think I'd put a recommendation behind it. If your interested in the PE industry, then yes but if not the book just drags on and its nothing eye-opening or spectacular

Apr 10, 2012

Agree with your recommendation as well. Thought it was a great interview of BX as well as the industry's development overall, with enough technical details to be useful but not so many as to bog you down.

Apr 10, 2012

Great book.

Apr 10, 2012

How the hell did they do deals without excel in those days? Holy shit, what will they be using 20 years from now?? Fuarkkkk. All ARE skills will be obsolete.

Apr 10, 2012
NewGuy:

How the hell did they do deals without excel in those days? Holy shit, what will they be using 20 years from now?? Fuarkkkk. All OUR skills will be obsolete.

We'll be asking Siri or Watson to run the numbers again with another turn of leverage.

Might have to add this one to the list.

Apr 10, 2012
illiniPride:
NewGuy:

How the hell did they do deals without excel in those days? Holy shit, what will they be using 20 years from now?? Fuarkkkk. All OUR skills will be obsolete.

We'll be asking Siri or Watson to run the numbers again with another turn of leverage.

Might have to add this one to the list.

Apr 10, 2012

You must really like the book as it's your second thread about it....

Anyway...

Verdict:
All in all i stand by my original review and think that while this book isn't at the same level of the classic books that deals with the industry, it is worth reading for someone who is in the business. I think that one should be cognisant of the political and ideological slant of the author.

tl;dr
Not as good as "Barbarians" or books by Lewis or Lowenstein, but readable as long as you can sift through the propaganda, PR and deal lists.

Apr 10, 2012

I am currently reading this book and absolutely love it. I do think there is a self-selection bias however as I am a big finance buff who also happens to be fascinated by history and biographies. To me, I gravitated to this book because I was intrigued by Blackstone's rise as well as an expose of Steve Schwarzman. Nonetheless, I can see why a "Barbarian at the Gates" fan may be soured by this book's partisan views and the overly-sanguine portrayal of Schwarzman and Blackstone.

I wouldn't recommend this book for a professional just entering finance since it is hard to contextualize the scene and the characters. For a finance professional with a solid understanding of history and the major players (of past and present), this book is a must-read.

Apr 10, 2012

Haha yes, Rel, I was convinced to buy it after reading the comments on that thread. Finally read it and thought I would give a review on it.

I agree that there is certainly some bias embedded in there, especially in the later chapters. The timing of its release seems all too apt for Romney as well. Anyway, Carey does try to show both sides of the coin. There are numerous accounts in the book where blackstones (and other PE firms) investments failed.

Apr 10, 2012
M Friedman:

Haha yes, Rel, I was convinced to buy it after reading the comments on that thread. Finally read it and thought I would give a review on it.

I agree that there is certainly some bias embedded in there, especially in the later chapters. The timing of its release seems all too apt for Romney as well. Anyway, Carey does try to show both sides of the coin. There are numerous accounts in the book where blackstones (and other PE firms) investments failed.

I really like the "insider" look at deals, but I don't know that I would recommend it for the reasons Relinquis said.

It's important to consider what PE is. It could be fixing broken companies, it could be cashing out cash flow machines. One of Blackstone's biggest successes foundered as a public company because of its debt load, despite having a growth-oriented business.

Div recaps is my biggest objection to PE: (http://www.newyorker.com/talk/financial/2012/01/30...) . Not every firm uses them, but they aren't really defensible when discussing economic impact of an industry.

Apr 11, 2012
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