"You're a complete idiot. I never should have given you a dime."
One of Blackstone's first investors to Steve Schwarzman
Nearly 40 years ago, Blackstone launched its first buyout fund. They talked to 500 investors, got 33 commitments, and raised $850M in the aftermath of the 1987 stock market crash.
Their first deal was an absolute homerun. A $13M investment yielded 4x within two years. But Scwarzman's third deal was a disaster and seems to have heavily influenced the firm's outlook on principal preservation.
Pick your favorite saying...
"This too shall pass."
"It's never as good or as bad as it seems."
"Every storm runs out of rain."
"If you’re going through hell, keep going."
"Rough seas make stronger sailors."
They're all true and--unfortunately--many real estate players may need these reminders over the next year or so. Not out of the woods.
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