So we have to work with our investors, our limited partners, other private equity firms to assemble a deal that gets much more than $10 billion of enterprise value. But for listeners, you know, you dont have the same capital costs. BARATTA: Yeah. RITHOLTZ: First of all, how did you first get involved with them? Get subscriber-only insights and news delivered by Barry daily. Joe Baratta is preparing for a new world. 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. Switchboard: +1 (212) 583-5000. RITHOLTZ: And then we talked about the companies that youre on the boards of, but youre also a trustee of the Tate Foundation, which I assume is related to the giant Tate Museum in London. 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. And weve become better at what we do in buying control of companies, engaging with them, making them better, helping them grow. 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. I love football. So you move to the U.K. RITHOLTZ: Youre an hour to hop from all the key places . And to me, that was a more comfortable form of investing and where I wanted to bet my career. From 2004 until 2010, we were having babies, and one of the places we would always go is either Tate Britain or Tate Modern. But I love the announcement when you were promoted to Global Head of PE from Blackstone, they said the 73 investments and pending deals youre involved, and combined for $117 billion in revenue, the equivalent of the 13th largest company by revenue on the Fortune 500 list. And there are thousands of companies in the U.S. . BARATTA: But they were private equity. And I think people just need to relax, take a deep breath. I have to point out that your life history is a series of ever-worsening weather. Where is the most fertile ground for growth size-wise? Youve been there for 25 years. As for the right way, the correct way, and the only way, it does not exist. BARATTA: Yeah, thats part of it. BARATTA: So I think we just raised a small credit fund, which is $900 million, and then we had an M&A advisory business. Financial Advisors, visit our dedicated website to learn how you can partner with Blackstone. RITHOLTZ: And everybody started drinking and we looked at each other, can we have a drink that morning? RITHOLTZ: What about geographies? Since Sundar Pichai became CEO of Googles parent company, Alphabet, in 2019, he has been honest with colleagues about the difficulties of overseeing a sprawling conglomerate thats under constant strain from internal power struggles, regulators and rebellious employees. Disclosures RITHOLTZ: I didnt realize philanthropy was that different overseas than it is here. Markets never sleep, and neither does Bloomberg News. BARATTA: crisis. And the total AUM of our private equity business, AUM assets under management is roughly $80 billion, $90 billion. RITHOLTZ: based on whats going on. On average, Joseph trades about 53,227 units every 51 days since 2020. About 10 or 15 years later, we actually did work together, and he acknowledged that moment and said, God, I just thought you guys were just such jokes. If you enjoy this conversation, well, be sure and check out any of the previous 500 or so weve done over the past eight years. The first deal we looked at was in France. View stories on our mobile app and tune into our weekly podcast. As of 1 April 2023 he still owns at least 1,145,448 units of Blackstone Inc stock. But were seeing solid demand. Mr.Barattaalso worked at Morgan Stanley in its mergers and acquisitions department. BARATTA: Its certainly investable for venture investors and smaller guys who are willing to sort of dig holes in the ground and hope something comes out. I mean, at least, it was back then. Scrutiny, Apple Drops Lawsuit Against Former Chip Executive Over IP Theft, Coinbase CEOs Pay Shrinks as Stock Slides. And we were kind of oddities at that time, particularly in private equity which was still really in its infancy. And in fact, I invited him to come talk to our partner group. So we were working with our real estate guys in health care facilities, and visitor attractions, and theme parks. Joseph Baratta is an American business executive who is Global Head of Private Equity at Blackstone, a New York-based global asset management giant. Whats appealing? How do I contact Joseph Baratta? Two years ago, Joe Baratta couldn't figure out what Blackstone, the private equity giant he worked for, should do for its next move in media and entertainment. And within Blackstone, our private equity funds are called Blackstone Capital Partners. What is energy transition? But it is looking at whats more attractive and whats less attractive. BARATTA: I think early on, it was important until we established ourselves, and then we did less of that. Brown shoes that are for like, you know . And so, corporate carve-outs, public to private, you know, the last few deals weve done, a bit of large corporate carve-out from a large important American corporate, Emerson. RITHOLTZ: You start out in California. RITHOLTZ: So I really liked the first season. BARATTA: But these sort of Americans were tolerated, you know? You know, the blockchain, when it came people like, hmm, Im always like, whats the use case? In the early days, do whats asked of them, do it as well as they can, and move on to the next step. And, yes, if Jerry needs some help, you know, he knows who to call. Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives. You had a longer period of time to figure out if you were right or not. BARATTA: Yeah. Blackstone is one of the worlds leading investment firms. And also, there are new business models, new media models. It has to be useful if you have skills. So lets talk a little bit about the state of PE investing today. It is an institutionalized asset class. How Greed and Easy Money Corrupted Wall Street and Shook the World Economy Sebastian Escobar is my audio engineer. So one of our first hires, now, the man who runs our business in Europe, we hired this guy, Lionel Assant, whos French, and we hired Germans. So when I looked at the world of higher rates, does it have a big impact on how you structure deals, or is it just a factor thats going to move up and down and everybody just changes their spreadsheets and the numbers all just move higher? 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. BARATTA: I think it was 2005, when we started to look at in China and in India, in particular, and also Japan. And, you know, I needed to earn some money and I was adept in finance. The estimated Net Worth of Joseph Baratta is at least $181 Million dollars as of 1 April 2023. Baratta, who joined the firm in 1998, is also a member of the board of directors and serves on multiple management committees, as well as the firms investment committees. I recognized that it was still pretty early in the development and there should be a lot of growth in these firms. For office-specific contact information, please visit our our offices page. It kind of helped us get off the ground, so to speak. NEW YORK-- ( BUSINESS WIRE )--Blackstone (NYSE:BX) today announced that Joe Baratta, the firm's Global Head of Private Equity, will join its . I think because the private equity investing model has been really good for our clients, which are state pension plans, sovereign wealth funds, you know, ensuring the retirement safety of many tens of millions of people. And what sort of input do you give to managements there? RITHOLTZ: By the way, there are a lot of different names for Blackstone. We use cookies for a number of reasons, such as keeping The Information reliable and secure, personalizing content and ads, providing social media features and to analyze how our sites are used. Its a solution and source of a problem, sort of. Am I exaggerating that at all or . So when youre adjusting your investment posture, youre basically saying were going to take more risk or less risk . And I was doing my pitch, so here I am, 30 years old. Read deeply reported stories from the largest newsroom in tech. BARATTA: Well, its not necessarily a problem to do that with some of our friendly competitors. And there, we were two young Americans, no language skills, like what are we supposed to do? So lets talk about your mentors who helped shape your career. Blackstone's global head of private equity, Joseph Baratta is in contract to pick up a sweet 6-story townhouse from music mogul Lyor Cohen (he's Tory Burch's boyfriend), the NY Post reports.. Theres nothing intimidating about those institutions, and then I knew some people who are involved. For press inquiries, contact[emailprotected]. Im doing my pitch on Blackstone and were good friends. RITHOLTZ: You want to control and be able to set how youre going to exit or how the firm is going to be run? And the whole firm was maybe 200 total employees , BARATTA: not just investment people, total staff. You see it in real-time across real estate, across labor . Terms and Conditions. Its where we have competitive differentiation, and its where you find better quality businesses. Our final question, what do you know about the world of investing today you wish you knew back in the 90s when you were first getting started? By the way, my wife loves the Tate Modern, one of her favorite museums. And the way buyouts are being financed is evolving away from syndicated big syndicated capital structures committed to by banks to now the people who are actually going to hold the risk, firms like ours and Apollo and Ares and others, who are actually lending money directly to the people who are borrowing, instead of going through the banking intermediaries. 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. This seems to really be a potential sea change. He was the senior guy at that time. We hired an Italian for the firm, Andrea Valeri. BARATTA: Not a bit, not a bit. BARATTA: Yeah. Over that 25-year period or even the past decade where youve tripled in size, its more than just quantitative. RITHOLTZ: Yeah, supposed to be sort of loosely fashion day . Its obvious in the public markets, things get frothy. It seems like private equity is qualitatively different than it was back in the early days. You saw it in the financial services sector. Why am I talking to him? Joseph P. Baratta serves as Global Head of Private Equity and Director of the Company of the Company. Im Barry Ritholtz. And as an asset class, theyve performed extremely well, with low incidence of loss, good returns. I mean, his family dates back to like Louis Quatorze. All of our earlier podcasts on your favorite pod hosts can be found here. You know, in the market, its like if you start at the wrong time, if youre wrong for a few quarters, like, boom, like the career is abbreviated. RITHOLTZ: Really interesting. Blackstone Inc's most recent insider trade came on April 4, 2023 by Joseph Baratta who sold 85,000 units worth $7.34M . Thank you, Joe, for being so generous with your time. RITHOLTZ: I was waiting for you to say, and it was 10:00 a.m. and they broke open the bottles of Bordeaux. Its not just like the next deal, the next promotion, the name in the paper or whatever. And then we started seeing significant signs in inflation, particularly in our real estate business, with rents going up significantly, wages going up across our private equity portfolio, beginning to see pricing power for many of our companies that they hadnt had in a long time. And now, the rate of change is much more quick with the advent of technology, ubiquitous broadband, which really enabled the internet, changed the way we . So, yes, private equity valuations are influenced very significantly by whats going on in the public markets. BARATTA: Well, you have to get him back. I dont know what they call themselves back then. Mr.Barattagraduated magna cum laude from Georgetown University. BARATTA: into peoples pocketbooks, which massively accelerated the economy and rates stayed low. But we can, things that are mature, things where weve realized value, sometimes were taking companies public and we can sell stock. Joseph Baratta is 46, he's been the Global Head of Private Equity and Director of the Company of Blackstone Inc since 2020. You see these things before they start to show up in the economic data. In terms of sectors, the real value dislocations have happened in the technology industry. As companies got larger and larger, it seemed like banks went upscale with them and left sort of a gaping void in the middle, where, you know, mid-market companies didnt have a merchant bank that could facilitate loans, credit, anything . So its a whole broad spectrum of investing in the energy complex focused on the transition from hydrocarbons to renewable sources. I think were 4,500 , BARATTA: or something like that. So the way I do, you know, this job, in addition to managing a bunch of our people and engaging in other stuff at the firm is I want to keep a hand in the investing, and engaging with our company. Is there a ceiling, or at what point you look at something and say, hey, thats just too big to try and take a bite on? I liked it, I thought I could build a successful career. What sort of new markets are you guys considering? Thats why, as an investor, Im much happier today because were able to buy things more cheaply. RITHOLTZ: Hell reach out to Steve, Steve will put you in touch. So, yeah, theres a few companies where Im closely involved, and I sit on the board and I help their management teams plot strategy and deal with important strategic issues. All of our earlier podcasts on your favorite pod hosts can be found here. Its really quite fascinating. And so. RITHOLTZ: So heres the really interesting observation that youre making, Blackstone has boots on the ground in all these different sectors. For a brief while, we had an office in Hamburg. You can take margins up. And so, you know, my base case was that it wouldnt and youd have like called it wonkily like mean reversion in global cost of capital, which means rates would go up, market risk premiums would go up, you know, PE multiples would come down, credit spreads would probably gap out. From Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life by Arthur C. Brooks. Deadly. To view recent press releases, click here. You know, I sort of looked at, well, the industry in Europe is a good decade or two behind the U.S. So not a lot of money, you know, get engaged in the arts and really important cultural institution; where in the U.K., its less sort of focused on the elite and more focused on like the democratization of art and culture for the people of the U.K., and I really identified with that. And heres this like schmuck from Sacramento, like, you know, 30 years old, like pitching him on why wed be a good partner for him. It was a small industry. Is this just part of the life cycle of business, or do you go through these periodic spasms where everything changes? The other one I love is White Lotus, which is fantastic, not a Black Swan-related thing, also awesome. For office-specific contact information, please visitour offices page. Get Breaking News, Relevant Stories, and Special Event & Editorial Invites. 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 . It feels like were very early stages of transitioning to being able to pull up somewhere and spend 10 minutes charging the car to get you another 100 miles or so. 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. And David and I moved over to do the private equity stuff. Like, the last $30 billion deal we did, I mean, we bought Medline in 2021. And I was like, geez, okay, well . And then by the time youre in your 40s, you can actually be good at this job. BARATTA: And I think they nailed it. Now, the firm had assets. There werent that many people. RITHOLTZ: Really quite interesting. RITHOLTZ: firms or private equity firms? 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. IRL Suspended CEO Shafi After Reported Pattern of Misconduct; Acting CEO Named, By Mark Matousek · April 30, 2023 2:33 PM PDT. It sounds like a good background for someone who eventually ends up buying companies. BARATTA: Yeah. BARATTA: Steve Schwarzman, our co-founder and CEO and chairman and, you know, amazing mentor and great businessman. 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. At first, Blackstone executives discussed the idea of Mayer consulting with the firm or managing one of its existing portfolio companies. BARATTA: Yeah. Its one firm made unified. He also sits on the firms Management Committee. We dont spend too much time thinking about like when that might end and the ramifications of it. Bloomberg Daybreak Europe, anchored live from London, tracks breaking news in Europe and around the world. RITHOLTZ: And you had mentioned private credit before, that seems to have been a giant growth area, especially when rates were at zero, when people arent seeing a whole lot of returns from fixed income. And the fact that financing costs are higher, kind of its neither here nor there because our returns are not predicated really on the cost of financing. A special committee of messaging app IRLs board of directors suspended CEO Abraham Shafi on Friday after receiving a report from outside counsel that outlined a pattern of misconduct by Shafi, an IRL spokesperson told The Information. BARATTA: Its a real thing in Europe. Barry Ritholtz. Theres plenty of great smaller banks whose business strategy is to serve smaller and medium-sized businesses. Happy to be here. You know, energy prices are higher. BARATTA: Exactly. You got to get it elsewhere. RITHOLTZ: And have done a pretty nice job, right? MarketCounsel and Hamburger Law Firm are the leading business & regulatory compliance consultancy to the countrys preeminent entrepreneurial independent investment advisers in the investment and securities industry. Just like life gets in the way and I had, you know, a cool career going and I stuck with it. Theres some like risk management things that you always need to be mindful of. Now, in that moment, Americans were sort of viewed positively and as neutral. You mentioned real estate, private equity, M&A. But thats not uncommon to see private equity firms taking companies private and transacting with public companies. It takes a long time to figure out like how you get good at something and the particular way you want to do it. And the guy looks at me like I had, you know, two horns coming out of my head, whos his young American? This website uses cookies, including third-party cookies, in order to obtain information about your visit to the website and make this website better. Blackstone secured $8.2 billion for a second long-life offering, 70 percent more than the strategy's 2016-vintage debut fund. We find great management teams.
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