Financial Advisors, visit our dedicated website to learn how you can partner with Blackstone. Because it looks like a couple of big companies push their way in, there were a couple of transactions, or is this going to, you know, be the fertilizer that launches a thousand blooms, or whatever the expression is? But, in general, we became much more risk averse, risk-off in that, you know, mid 2021 period. Kirk Falconer - January 10 2022 + RITHOLTZ: I was waiting for you to say, and it was 10:00 a.m. and they broke open the bottles of Bordeaux. And we were like, look, wed be great partners as youre looking at assets. Our model is not to run the companies. He is also a member of the firm's Management Committee and serves on many of the firm's investment committees. I would be remiss if I did not thank the fine team who help put this conversation together each week. RITHOLTZ: Well, so far, youre pretty interesting. Since joining Blackstone in 1998, Mr. Baratta has been involved in the execution of Blackstone's investments in Universal Orlando, Nycomed Pharmaceuticals, Houghton Mifflin, Spirit Group and was responsible for Blackstone's investments in First Eagle Investment Management . And then at Blackstone, you know, Steve Schwarzman changed my life; and Tony James, who when I was about four years into Blackstone, really helped transform the firm and make it what it is today. RITHOLTZ: youre stepping right into the thick of it? And I know the size, it was 32, 33, 34, $35 billion. In terms of sectors, the real value dislocations have happened in the technology industry. People were declaring last summer, were already in a recession. He is an entrepreneur, attorney, consultant, and advocate for independent investment advisers, which is a $97 trillion industry. Like, the last $30 billion deal we did, I mean, we bought Medline in 2021. I love football. And I think if you add it all up, we have about $40 billion of funds that were currently investing in their investment period. The oldest executive at Blackstone Inc is BrianMulroney, 81, who is the Independent Director of the General Partner. Because people start so early, you have to do so much to get in college. So, as an investor, you have to be nimble. Im not saying were clairvoyant and we handled everything perfectly. Most recently he sold 85,000 units of BX stock worth $7,337,200 on 1 April 2023. To view recent press releases, click here. One of the things that I have to follow up with is how important was it partnering with local other investors and other VCs or PEs? RITHOLTZ: Really interesting. BARATTA: But they were private equity. Mr. Joseph Patrick Baratta, also known as Joe, has been the Global Head of Private Equity at The Blackstone Group, Private Equity Group since July 2012. RITHOLTZ: So eventually you leave Morgan Stanley, you ended up at Tinicum Incorporated and McCown De Leeuw & Company. And weve become better at what we do in buying control of companies, engaging with them, making them better, helping them grow. BARATTA: Ive been really fortunate in my life where Ive had, you know, along the way, in the journey, Morgan Stanley, at McCown De Leeuw, at Tinicum which is the Ruttenberg family, where in each of those places, Ive had somebody who really helped me in my career and with whom Im very close even today. I had no language skills. The first job for Morgan Stanley was McCown De Leeuw. And, you know, why is that? Is this simply becoming institutionalized, or has the asset class been validated and now people are treating it differently than they did in the 90s where it was kind of a small niche , RITHOLTZ: backwater? And so we partnered with a few local firms and actually one of our U.S. competitors to look at this big asset, because it was quite big. RITHOLTZ: So before we let you go, were going to jump to our favorite questions that we ask all of our guests, starting with you mentioned streaming, tell us what youve been watching, what keeps the family entertained? There werent that many firms. BARATTA: And then, of course and now, look, theyre fun to watch. Joseph Baratta is the Global Head of Private Equity and a member of Blackstone's Board of Directors. In the early days, do whats asked of them, do it as well as they can, and move on to the next step. I will learn something, and Ill have something else to do on the other side of it. Now, the funniest story I can remember is, in these early days, when we were out trying to introduce ourselves to the local private equity firms, I went to Paris and went to Lazard Freres, which was you know, that is the bastion of, like, French establishment business. These are people who were, you know, in their late 20s, early 30s, oldest maybe mid-30s, and they kind of grew up with the firm, and they were able to be the translator, so to speak, both physically and culturally, in some of these other countries. And we want to invest not just in digital virtual assets, but also in physical assets. And so, we began to hire local people who were young in their careers. Im 30 when I moved, you know, yeah, because it was 2001 and, you know, it was just after September 11th. So even like undergone dusk could be successful. We hired an Italian for the firm, Andrea Valeri. And so. In the real estate, its Blackstone Real Estate Partners, and then there are variants on that theme. Disputes over compensation and firings, and potentially over layoffs, could push both sides into fresh legal battles. Switchboard:+1 (212) 583-5000. The modern day striker has to be many things to make it to the top. These are physical assets. Transcript: Joe Barratta of Blackstone April 18, 2023 8:00am by Barry Ritholtz The transcript from this week's, MiB: Joe Barratta, Blackstone's Global Head of Private Equity, is below. The music is great. RITHOLTZ: So really a period of transition and . You see it in real-time across real estate, across labor . How are you looking at a geopolitical event like that affecting, you know, whats taking place on the continent? So I actually think, at the large end of the private equity market, were undercapitalized. Abraham Shafi has stepped down as CEO of messaging app IRL following allegations that the company used bots to inflate the users it reported publicly and to investors, according to a person with direct knowledge. BARATTA: Like, it probably isnt going to happen forever. Learn More Get subscriber-only insights and news delivered by Barry every two weeks. Tell us about those experiences. I mean, there have been leveraged loans and high yield bonds since the 1980s. And so we sort of followed our real estate colleagues, where they went and establish a toehold, became successful. Then, in the fall of 2020, Baratta huddled with Kevin Mayer, a longtime Disney executive who had just left TikTok as CEO of the social media app. So, you know, the answer is we cant really get deals much bigger than, you know, $10 billion to $15 billion done on our own. This week, we speak with Joseph Baratta, who since 2012, has served as Global Head of Private Equity at Blackstone the worlds largest alternative asset manager, with $975 billion in assets under management. Portions of this site are directed only to persons in certain jurisdictions. Im doing my pitch on Blackstone and were good friends. Where are you looking around the world? Be sure to check out ourMasters in Business next week with Brian Hamburger, founder of MarketCounsel and Hamburger Law Firm. It does this by using extraordinary people and flexible capital to help companies solve problems. And, you know, cost structures are a little less efficient there may be than in the U.S. now. BARATTA: Well, what brings me energy and joy in my job is investing capital and working with companies. Yeah. Roger Staubach, Tony Dorsett, Tony, RITHOLTZ: Oh, really? I mean, you have a bunch of companies that have trillion dollar-plus market caps. That doesnt happen. RITHOLTZ: So you end up at Blackstone in 1998, at a time when public equity prices became a little unmoored and were on the way up to a real bubble. Off-duty: Blackstone's Joe Baratta on gravel biking, Cloud Cuckoo Land and the Dallas Cowboys Baratta's shares his New Year's resolution, books he's reading and high and low career moments, as well as his fantasy management role in the NFL. They also share their perspectives on the opportunity in live entertainment, one of our high-conviction investment themes. BARATTA: A growing economy, zero cost to capital, markets compounding at 15, 16, 17 percent. When Baratta led private equity giant Blackstone Group's 102 million ($136 million) deal to buy Merlin Entertainments in 2005, the U.K. theme park group was best known for the macabre London. NEW YORK-- ( BUSINESS WIRE )--Blackstone (NYSE:BX) today announced that Joe Baratta, the firm's Global Head of Private Equity, will join its . Joe Baratta is preparing for a new world. RITHOLTZ: You see that on the private market? Over that 25-year period or even the past decade where youve tripled in size, its more than just quantitative. We all wanted to get there fast, but I think its entered a new level. Whats appealing? How Greed and Easy Money Corrupted Wall Street and Shook the World Economy So we kind of went on, did some missionary work, meeting the local private equity firms in France and, of course, in the U.K., in Germany, up in the Nordic region, in Italy, and we just met all the other players. Valuations go up and you saw it, of course, in the late 90s, in the tech sector. So, you know, you could go to France, maybe they didnt love, you know . Its one firm made unified. You have your way. Mr. That was our first deal in Europe, which was actually a U.S. deal, but we probably wouldnt have done it had we not been there . Mr.Barattahas served on the boards of many past Blackstone portfolio companies and currently serves as a member or observer on the boards of Ancestry, Candle Media, First Eagle Investment Management, Medline and Merlin Entertainments Group. BARATTA: You know, the book I most recently finished, by Arthur Brooks, a book on happiness. The first deal we looked at was in France. What sort of a challenge does that present for private markets? And so, thats what we were able to do to a large degree, is to become more conservative, to become more cautious on valuations, you know, as we started seeing evidence of inflation, and thinking that rates were probably going to go up at some point. RITHOLTZ: across all these different inputs. Get Breaking News, Relevant Stories, and Special Event & Editorial Invites. His current reading is here; A transcript of our conversation is available here Tuesday. For press inquiries, contact [emailprotected]. You get paid for the incremental risk that youre taking in a more leveraged capital structure. RITHOLTZ: You could just access everything online as well , BARATTA: Fewer of them. But for listeners, you know, you dont have the same capital costs. By the way, my wife loves the Tate Modern, one of her favorite museums. This seems to really be a potential sea change. The other one I love is White Lotus, which is fantastic, not a Black Swan-related thing, also awesome. JosephBarattais the Global Head of Private Equity and a member of Blackstones Board of Directors. So you move to the U.K. RITHOLTZ: Youre an hour to hop from all the key places . RITHOLTZ: Lets talk about books. RITHOLTZ: Really quite interesting. In addition, he makes $0 as Global Head of Private Equity and Director of the Company at Blackstone Inc. So the rate of increases is declining. As for the right way, the correct way, and the only way, it does not exist. And so, weve pursued, in the last decade, a control strategy, and largely where we are an outsourcing partner, providing a critical component or service to Western companies. There was a big consolidation and lots of divestitures of pubs that were owned by brewers in the time, and there were rules came down that brewers can own distributors. You know, we spent a lot of time looking at traditional media businesses that linear TV, satellite broadcast, regional sports networks, all these things, that the direction of travel isnt really investable, the streaming services, direct to consumer. RITHOLTZ: How did you first get involved with them? Thursday July 19, 2012 11:50 pm. BARATTA: I mean, with all respect to the Joneses who run that team, you know . Like I said, theres a few fundamental enabling technologies that happen, ubiquitous broadband, internet to your house to your mobile device, which really enabled a change in retail and media models and communication models, and now this. Joe Baratta, The Blackstone Group: Profile and Biography - Bloomberg Markets Bloomberg TV+ Bloomberg Surveillance: Early Edition Bloomberg Surveillance: Early Edition with Francine Lacqua. RITHOLTZ: Really interesting. There are 23 older and 2 younger executives at Blackstone Inc. BARATTA: No. But in the moment, it was less wonderful. Thats why I joined Blackstone, it was one of the leading firms in that moment. Those do seem to be valued relatively more attractively. Switchboard: +1 (212) 583-5000. RITHOLTZ: So lets talk a little bit about some of those places. And so, instead of investing in those, we decided to back Kevin Mayer and Tom Staggs, two ex-Disney guys, really well-regarded business guys in the entertainment industry, to build an independent content creation business, which weve done both in childrens content with Moonbug, and in live action entertainment with Hello Sunshine, which was the business that Reese Witherspoon started. The Tate Foundation is the private philanthropic arm of the Tate that helps fund special projects, whether its exhibitions or building new buildings, you know, the big Tate Modern gallery was, in large part, funded by private donations. From Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life. Ive been super lucky to have these fun adventures, whether or not with Stanley. The whole aesthetic of it is amazing. I mean, some of your holdings like Hilton, obviously, giant. Follow me on Twitter @ritholtz. I really wanted to learn how to invest money, not just be an advisor, and I thought private equity was cool because you werent at the whim of the market. BARATTA: You know, I had young kids. BARATTA: What weve found is that control is important in India. But I dont think were going to go back to the days of 2019 to 2021. You know, bigger technology companies, software businesses that have proven theyve got really durable sticky revenue models. Maybe theyre not run that efficiently. It had a lot of momentum. Blackstone Group Inc Chief Executive Stephen Schwarzman pocketed at least $610.5 million in 2020 from dividends and compensation, more than any other private equity executive and up 20% from last . BARATTA: And I had very modest expectations like, geez, if I can last two or three years, at least I will have done it. The Fed was saying, no, its transitory or whatever adjective they used. RITHOLTZ: You want to control and be able to set how youre going to exit or how the firm is going to be run? Get subscriber-only insights and news delivered by Barry daily. And were like, whoa, this is the sign, like this is the canary in the coal mine. When I started at Blackstone, I think weve just started investing our third private equity fund. Joe Baratta, Blackstone's global head of private equity, says even though loan markets are not really open right now Blackstone is well-suited to have access to capital. RITHOLTZ: So lets talk about geographies, and lets talk about sectors. Business models are changing. BARATTA: Yeah. Mr. Baratta owns over 85,000 units of Blackstone Inc stock worth over $99,814,339 and over the last 3 years he sold BX stock worth over $81,255,679. RITHOLTZ: Is AI investable? Hes probably 42 or 43. Its where we play. The big TV companies, such as ViacomCBS and Discovery, were bleeding viewers as people cut the cord to cable television and streaming powerhouses like Netflix grew ever bigger. So when youre adjusting your investment posture, youre basically saying were going to take more risk or less risk . Clearly, there was a ton of hype in crypto. But youre looking at valuations and what sort of multiples you want to pay. Over the last 16 years, insiders at Blackstone Inc have traded over $2,308,931,535 worth of Blackstone Inc stock and bought 906,721 units worth $30,000,792 And within Blackstone, our private equity funds are called Blackstone Capital Partners. BARATTA: Well, one thing that John and Steve have done is to make sure the firm is really joined up across our investment businesses. The firm had had , RITHOLTZ: Do you need language skills in England, or is it . BARATTA: Steve Schwarzman, our co-founder and CEO and chairman and, you know, amazing mentor and great businessman. We never have to sell, only when we want to because we control the companies. Monitor your investments 24 hours a day, around the clock from around the globe. Ive heard people say Blackstone, Blackstone Group, Blackstone Partners. Elon Musk May Yet Meet Twitter Executives in Court. RITHOLTZ: tell us about Blackstones boss. So we were materially bigger than we were 25 years ago. What sort of new markets are you guys considering? We find great management teams. Its attracted a lot of capital. RITHOLTZ: And when you say Steve, for those people who may not be familiar with . stonco lighting catalog. and Merlin Entertainments Group. I mean, his family dates back to like Louis Quatorze. Calhoun will lead Blackstone's private equity portfolio management group, which basically means that he will aid CEOs with various operational challenges. Its where we have competitive differentiation, and its where you find better quality businesses. What is . Thats another in market that were investing in today, that maybe a decade ago, we wouldnt have been. RITHOLTZ: So Joe Montana, Jerry Rice didnt suck you in. So the second deal we did was we worked with another firm, a local U.K. firm called CVC and also TPG to buy Scottish & Newcastles pub divestiture. BARATTA: Yeah. So its been really significant growth. Global Head of Private Equity, Joe Baratta, shared insights on how Blackstone is thinking long-term in this business cycle and how investors can prepare - by focusing intently on sector &. And so, in terms of where our teams are spending time, its in and around sort of public markets. Its not just like the next deal, the next promotion, the name in the paper or whatever. So Im really proud of what they did there, and its a great show. RITHOLTZ: Im not being sarcastic. I was supposed to go over you know, in November, I ended up doing that. It kind of helped us get off the ground, so to speak. Publicly traded Blackstone . Blackstone Group is talking to its biggest investors to create a "coalition of the willing" that can buy control of large companies outside its existing funds, according to Joe Baratta, head . He was the senior guy at that time. BARATTA: I think it was 2005, when we started to look at in China and in India, in particular, and also Japan. BARATTA: I think private market valuations are driven to a large degree by whats going on in the public markets. BARATTA: And it is this perfect example of what we thought Hello Sunshine could do, the convening power to assemble that amazing ensemble cast, amazing music creators, and create something that is really important to, in this case, Amazon Prime, to be an important counterparty of the streamer. How did the buildout go for a couple of young Americans saying, hey, we want to play with this private equity thing in the EU? RITHOLTZ: Similar to U.S. antitrust rules . So you do some really interesting work at Blackstone, including serving on a lot of portfolio companies boards. Are goalscorers born or made? Well talk a little bit about your time in London later. Theres real inflation. So it was a beneficiary of the technology change. And so, Im proud of how we navigated that cycle, and I think were in a more normal world. So we did a lot of these sorts of consolidation place. Blackstone Inc's most recent insider trade came on April 4, 2023 by Joseph Baratta who sold 85,000 units worth $7.34M . Well, if you do this if youve been doing this long enough, which fortunately, I have, since really 1095, you see different cycles, and you see what happens when capital becomes cheap and money becomes easy, and interest rates are lower, not really a factor. The estimated Net Worth of Joseph Baratta is at least $181 Million dollars as of 1 April 2023. And so, that didnt happen until 2002. It changed the way we communicated with each other. Thats just because . BARATTA: If Apple decides it wants to buy something for, you know, 10, 20, 30, 40, it doesnt blink, and there are a lot of companies like that. And I was like, geez, okay, well . Yeah. Its a great group of people, great organization. Even though the buyout king has no plans to retire, the appointment of Joe Baratta, a 41-year-old dealmaker credited with building up the firm's European buyouts practice, was the latest step. Focus now turns to Lionel Assant, the man widely expected to replace him at the helm of the firm's European division. RITHOLTZ: Happy to have you. Youve been listening to Masters in Business on Bloomberg Radio. And, you know, what I sort of decided as well, fragmented industries, where you could drive consolidation that had happened already in the U.S., things like, in the U.K., pubs. To receive email alerts from Blackstone, sign up below. I started at Blackstone in July of 98, and I guess what was going on that year, you had like a Southeast Asian currency crisis. RITHOLTZ: So its not like the public markets where you could say sell here, buy there, because you have such obvious prints . Terms and Conditions. Receive a summary of the day's top tech newsdistilled into one email. What are the challenges of investing in a place like India? You can see the complete history of Mr. Baratta stock trades at the bottom of the page. BARATTA: You know, the whole notion of energy transition is a market that a decade ago, energy investors were investing in upstream oil and gas or in midstream companies. And so, you know, that was kind of the strategy Day 1. I mean, for us, in corporate private equity, no. I mean, at least, it was back then. Speaking on. Do you have the same phenomenon in the private market? Privacy Policy RITHOLTZ: Right. its $619 billion in assets under management include investment vehicles focused on private equity, real estate, public debt and equity, life sciences, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis. That had to be a giant challenge, especially given what was taking place. RITHOLTZ: So lets talk about some of those different types of funds. What is energy transition? RITHOLTZ: Youre looking at the cost of capital and how much margin or leverage you want to assume. JOSEPH BARATTA, GLOBAL HEAD OF PRIVATE EQUITY, BLACKSTONE: Thank you. 2013-2023 The Information. Theyre predicated on buying a good business, doing something to make it grow more quickly, and having an attractive exit when we come to sell it, which means it has to be a good business. And so, in private equity . RITHOLTZ: Really interesting. Yeah. And there, we were two young Americans, no language skills, like what are we supposed to do? RITHOLTZ: Really quite fascinating. In private equity, you know, were owning things for 5, 6, 10 years and were not subject to, like, the vicissitudes of the market in the short run. they do. The global head of private equity at Blackstone Inc. spelled out the conundrum he and the entire buyout industry is faced with: Financing is getting. So Im watching the Cowboys like every Sunday. Mr. Baratta joined Blackstone in 1998 and in 2001 he moved to London to help establish Blackstones corporate private equity business in Europe. And, you know, Ive lived in great places. BARATTA: Well, I think if you look at the evolution of the size of private equity transactions over the last decade, actually, they havent grown very much, notwithstanding the fact that the equity capital market cap is like three or four times bigger than it was in 2007. Bloomberg Daybreak Europe, anchored live from London, tracks breaking news in Europe and around the world.
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