Follow me on Twitter @ritholtz. What is . And by the time theyre 30, they wanted to have, like, declared victory on their career. BARATTA: Yeah. You mentioned real estate, private equity, M&A. And weve become better at what we do in buying control of companies, engaging with them, making them better, helping them grow. He is the Global Head of Private Equity at Blackstone. 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. So lets talk a little bit about the state of PE investing today. And the guy looks at me like I had, you know, two horns coming out of my head, whos his young American? All of our earlier podcasts on your favorite pod hosts can be found here. Mr. Baratta served as the Senior Managing Director and Head of European Private Equity at The Blackstone Group. BARATTA: What weve found is that control is important in India. But I could have evolved more quickly as an investor, you know, over time, and I continue to learn that lesson. Lets start out with just a little background on your career. What are you reading right now? BARATTA: Even more mature companies. The whole dressing custom, yeah. BARATTA: Yeah. The music is great. Atika Valbrun is our project manager. RITHOLTZ: So eventually you leave Morgan Stanley, you ended up at Tinicum Incorporated and McCown De Leeuw & Company. For office-specific contact information, please visit our our offices page. We were looking at taking remember the Vivendi at that time? Mr.Barattajoined Blackstone in 1998 and in 2001 he moved to London to help establish Blackstones corporate private equity business in Europe. I think they were operating at the really top of the industry, really smart people, good track record. 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. He helped to build out Blackstones PE business in Europe in 2001, moving to London in 2001. And so I didnt know, you know, what finance was all about. Blackstone already manages $439 billion across alternative assets such as private equity and real estate, and is looking for ways to grow further. 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. BARATTA: I think it was 2005, when we started to look at in China and in India, in particular, and also Japan. 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. RITHOLTZ: Well, the past decade, the intangibles have been super attractive. I dont miss a game. BARATTA: Yeah. And so, in the early 90s, analysts had these big investment banks, Morgan Stanley, Goldman Sachs, had sort of two or three options, you can stay there and become an investment banker and do that for a career, you could go into the emerging fields of investing in private equity or in hedge funds, or you go to business school, or maybe go to business school later. Mr. Baratta currently serves as Global Head of Private Equity and a Member of the Board of Directors of Blackstone, a leading global investment firm. For press inquiries, contact[emailprotected]. I dont know what they call themselves back then. I recognized that it was still pretty early in the development and there should be a lot of growth in these firms. 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. He is also a member of the firms Management Committee and serves on many of the firms investment committees. And today, the clear direction of travel is toward weaning ourselves or these big economies off of hydrocarbons for power. He is also a member of the Board of Trustees of Georgetown University; is a trustee of the Tate Foundation; and serves on the board of Year Up, an organization focused on youth employment. RITHOLTZ: Really quite interesting. RITHOLTZ: Really quite interesting. To me, this world is normal, not abnormal, with, you know, positive real interest rates. RITHOLTZ: So Joe Montana, Jerry Rice didnt suck you in. RITHOLTZ: We take for granted totally that youre out in a car, you can pull over anywhere and tank up with gas. Im assuming you guys . Not to say like we executed on that vision perfectly, I mean, we would have made some mistakes, but we definitely became much more cautious when the bull market really ramped up, in particular, post COVID, when not only did you have the low rates which the Fed double down on, you had this huge transfer payment from the federal government . BARATTA: you know, company-based. 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? Again, were not perfect. Mr. Baratta has served on the boards of a number of Blackstone portfolio companies and currently serves as a member or observer on the boards of directors of First Eagle Investment Management, Refinitiv, SESAC and Merlin Entertainments Group. Privacy Policy Since 2012, Mr.Barattahas served as the firms Global Head of Private Equity and is located in New York. It does this by using extraordinary people and flexible capital to help companies solve problems. Joe Baratta, Blackstone Group LP's top private equity dealmaker, can't be too cautious right now. BARATTA: Exactly. ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. Your base of operations when youre in the U.K. is London, but youre back and forth to multiple countries. And so, in private equity . BARATTA: That was very yeah, and you couldnt wear brown shoes. Mr. Baratta owns 1,145,448 shares of Blackstone stock worth more than $105,312,489 as of April 20th. BARATTA: Yeah. He is also a member of the firm's Management Committee and serves on many of the firm's investment committees. And so, that didnt happen until 2002. In the long run. 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. From Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life. We do think, at some level, it does affect the cost structures. Ive been following that series . RITHOLTZ: So I really liked the first season. 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. Deadly. Both in terms of the aggregate revenue of our company, size of our portfolio, were probably now something like 150 total investments, many hundreds of billions of revenue, hundreds of thousands of employees if you add up all of the companies in which were invested. The oldest executive at Blackstone Inc is BrianMulroney, 81, who is the Independent Director of the General Partner. And the total AUM of our private equity business, AUM assets under management is roughly $80 billion, $90 billion. Were seeing in our businesses real stability across most sectors. RITHOLTZ: So lets talk about geographies, and lets talk about sectors. You can take margins up. I would be remiss if I did not thank the fine team who help put this conversation together each week. And now, I think, you know, AI could be it probably is one of those other major sea changes, where business models turning on human beings doing rote tasks, you know, probably is not the future, and a lot of businesses are going to be dislocated. You know, energy prices are higher. And so. For office-specific contact information, please visitour offices page. Theres definitely been proof of concept for large scale institutional investors and even retail investors, that we can produce sustainable, predictable, above public market returns. BARATTA: I mean, theres no question that financing costs are higher, both debt and equity, which is a healthy thing because I think the global cost of capital was too low, induced by super low rates and capital allocation to riskier assets, institutional investors chasing return. What is energy transition? With no further ado, my discussion of private equity with Blackstones Joe Baratta. RITHOLTZ: I never would have guessed that. You know, to your point, like its hard to turn on a dime and say, sell the whole portfolio. 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. And they had like bottles of Bordeaux on the conference room table. In the early days, do whats asked of them, do it as well as they can, and move on to the next step. The Fed was saying, no, its transitory or whatever adjective they used. The most active insiders traders include James Breyer, Hamilton E James, and International Group Incaig . By submitting this request, you consent to receive email from Blackstone. So that is one sector that were investing, and that a decade ago, we wouldnt. So warm sunshine, no interest? You have to have like an open mind and realize that things are changing. I mean, you know, this is probably 2002. You go to D.C. You go to New York. RITHOLTZ: You start out in California. "For any professional investor, this is the most difficult period we've ever experienced . Whats it like trying to manage a rapidly growing private business, with eventually the currencies became more or less uniform, but different languages, different customs, different culture, different ways of doing business? Get subscriber-only insights and news delivered by Barry daily. RITHOLTZ: Youre looking at the cost of capital and how much margin or leverage you want to assume. RITHOLTZ: underneath it, because you dont have this obviously, and Im not going to teach you about the private equity business. 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. All of our earlier podcasts on your favorite pod hosts can be found here. Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. Blackstone has raised the largest-ever long-hold private equity vehicle as interest in the strategy from both investors and managers increases.. BARATTA: And, you know, philanthropy in the U.K. is at a different scale than in the U.S. And there, we were two young Americans, no language skills, like what are we supposed to do? So youre raising the bar. You know, economically, thats a big thing. You have your way. RITHOLTZ: So you lasted two or three years, and then you get tapped to go to London in 2001. 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. and Merlin Entertainments Group. 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. But youre not wrong, I mean, theres different names within the individual businesses, but we all work at Blackstone. stonco lighting catalog. In London, in September, I had him come to talk about like what it means to be from where you should be deriving your happiness. Even when you read that announcement from that was 2012 . Hours Left50% Off The Information Pro Ends TonightGet Pro. And then, like I said, theyre very accessible. Theres some like risk management things that you always need to be mindful of. You see these things before they start to show up in the economic data. This net worth estimate does not reflect any other assets that Mr. Baratta may own. Blackstone was right on their heels back then. And we were kind of oddities at that time, particularly in private equity which was still really in its infancy. To view recent press releases,click here. I mean, this is the ultimate French establishment. So I wanted to get a job at a private equity firm. Meet the frontrunner to lead Blackstone in Europe Terms and Conditions. BARATTA: No, no. And by the time youre in your 50s, with some wisdom, you can be really good at the job. But I cant explain it. Industry structures are changing. So our strategy was, and sort of David had conceptualized, like, were going to be the neutral Americans who can work with the local European firms to help them get deals done. And the whole firm was maybe 200 total employees , BARATTA: not just investment people, total staff. Mr. Baratta has been with Blackstone for 22 years, including ov You have your way. Thats interesting. You see it in real-time across real estate, across labor . they do. The Mysterious Man Behind - Institutional Investor Receive a summary of the day's top tech newsdistilled into one email. Inflation is significant. Two years ago, Joe Baratta couldnt figure out what Blackstone, the private equity giant he worked for, should do for its next move in media and entertainment. RITHOLTZ: Is AI investable? BARATTA: that are $10 billion to $15 billion-plus enterprise value company. RITHOLTZ: Yeah, supposed to be sort of loosely fashion day . And the size of our private equity business is you know, were now on our ninth fund. RITHOLTZ: Really interesting. We also discuss how Private Equity has developed over the past three decades from a small $50 billion alternative to a massive multi-trillion dollar investment sector. FourFourTwo gets inside the mind of a striker, interviewing the masters of the art and the men who have to mark them, including Jermain Defoe, Romelu Lukaku, Michael Owen, Martin Keown and Ledley King. Business models are changing. Youre still dealing with people in Brussels, and people in Paris, and people in Milan. When I started at Blackstone, I think weve just started investing our third private equity fund. RITHOLTZ: Really interesting. RITHOLTZ: You see that on the private market? It took a year for all those local currencies, literally paper and coin currencies, to come out of circulation and have euro bills. You know, the blockchain, when it came people like, hmm, Im always like, whats the use case? We were much more networked. For information on our privacy practices see our Privacy Policy. So a big part of what we do is trying to figure out where we dont want to invest, and whats going to be dislocated by ubiquitous broadband back in 2005, 06, 07, and now, AI with a rate of sophistication of that technology. Sounds like you guys arent aggressively in the, were in a recession or about to have a recession six months. Its one firm made unified. RITHOLTZ: At what point does size become the enemy? You end up in London. 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. We back them with capital and support, and we let them run the businesses. And so, yeah, there was a lot of volatility. Its been almost a year. BARATTA: I think private credit has filled the hole for these smaller businesses, but really not on the full banking suite. RITHOLTZ: than the first one. RITHOLTZ: based on whats going on.
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