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King of Capital summary

King of Capital

David Carey and John E. Morris · 2010

Some value given

Schwarzman and Peterson left Lehman Brothers and founded Blackstone in 1985.
Raising the first fund was slow, with many rejections.
Blackstone favored friendly deals with company managers over hostile takeovers.
The firm added real estate, credit and other businesses over time.
Blackstone went public in 2007, just before the financial crisis.

How did Blackstone grow from two founders into a giant?

Schwarzman and Peterson started Blackstone in 1985 with a small sum and spent a long time raising their first buyout fund. They built a reputation for friendly deals, worked hard on fundraising and added new businesses over time, like real estate, credit and hedge fund investing. That mix let Blackstone keep growing even when one area slowed.

Worth reading?Some value given. A clear history of Blackstone and private equity, told through Steve Schwarzman and Pete Peterson. Good for understanding how buyout firms work and grow.

ActionableLessons

Actionable

Write down the many no's you expect when raising money, and plan for them.
Pick one area next to your core business you could grow into.
Work with management teams as partners where you can.
Ask what parts of your business protect you in a downturn.

Lessons

Fundraising takes stubborn effort.
Diversified businesses are steadier.
Partnership with managers helps deals work.
Timing of big moves can matter a lot.

Quick answer

Our summary of King of Capital by David Carey and John E. Morris (2010), in our own words.

What 125x is: 125x is a web app at 125x.app. You connect your YouTube subscriptions, and it gives you a feed of the latest videos from the channels you follow, each with a summary: a verdict, the 5 key takeaways, and the spoiler, plus Actionable and Lessons tabs with more tips. You read that and decide what's actually worth opening.

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Who are Steve Schwarzman and Blackstone?

David Carey and John E. Morris are journalists who have covered deals and private equity.

The book draws on interviews with Blackstone's founders and partners.

The story in 5 parts

Leaving Lehman and starting Blackstone.
Raising the first buyout fund.
Big deals of the 1980s and 1990s.
Adding real estate and credit.
The IPO and the financial crisis.

A closer look

The early chapters show how hard it was to start. Schwarzman describes pitching dozens of investors and coming away with very little. A big commitment from a large insurer finally helped the first fund close.

The authors explain how buyouts work in plain terms. A firm buys a company with a mix of its own money and debt, tries to make it stronger and sells it years later. They show deals that worked and deals that went badly.

Real estate became one of Blackstone's biggest strengths. The book covers how the firm bought property companies and office portfolios, sometimes selling pieces quickly to lock in gains.

The book also looks at the 2007 IPO. Blackstone raised money near the top of the market, and its shares fell hard in the crisis that followed. The firm survived and kept growing, which the authors credit to its spread of businesses.

Business lessons from the book

Leveraged buyouts: buy with debt, improve, sell.
Friendly deals: partner with managers.
Platform growth: add related businesses.
Reputation: credibility helps raise money.

Who should read it

Finance readers, founders curious about private equity and anyone wondering how buyout firms make money.

About this summary

We wrote this summary in our own words from the book and its public reviews. It follows the same layout as a 125x video summary: a verdict, 5 takeaways, the answer to the big question, and Actionable and Lessons tabs. More in entrepreneur biographies.

FAQ: questions people ask

What is King of Capital about?

The history of Blackstone and its founders, Steve Schwarzman and Pete Peterson.

When was Blackstone founded?

In 1985, by Steve Schwarzman and Pete Peterson.

Is King of Capital worth reading?

Some value given. Clear on private equity, lighter on lessons for founders.