2016-05-13forbes.com

EVER SINCE THE FINANCIAL crisis, risk--the fuel for Wall Street's astonishing profitability--has been forbidden fruit. The Volcker Rule, for example, means that today the mightiest trading firm, Goldman Sachs, is effectively blocked from proprietary trading. Capital restrictions have likewise limited the lending and merchant banking activities of big banks, like JPMorgan Chase JPM -0.06% and Deutsche Bank , that would have ordinarily drooled over the GE deal. The power has shifted to the so-called "buy side," to asset managers, and among them none is better positioned than Schwarzman's largely unregulated $344 billion private equity conglomerate, Blackstone Group.

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So while regulators wring their hands over restricting compensation at firms such as Citigroup C -1.06%, UBS and Morgan Stanley MS -0.49%, Schwarzman happily counts the $800 million in dividends and gains he personally took home in 2015, 34 times the $23 million that Goldman's chief, Lloyd Blankfein, earned and almost 30 times the $27 million paycheck for JPMorgan Chase CEO Jamie Dimon. Schwarzman's net worth stands at $10.2 billion, making him one of five billionaires Blackstone has produced--more than any other Wall Street firm in history.

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In the past eight years Blackstone's footprint and influence under Schwarzman have become nothing short of breathtaking. Since the financial crisis Blackstone's assets have nearly quadrupled. More than 85% of its 2,070 employees have joined since 2007, and the firm has introduced dozens of new products. Blackstone has major stakes in 92 companies, from Hilton Hotels and Michaels Stores to iconic brands like Versace and Leica Camera; it owns thousands of pieces of commercial real estate, including Manhattan's Stuyvesant Town and Chicago's Willis Tower, and more single-family homes in the U.S. than any other private entity. In nearly every business in which it operates, including hedge funds and credit, Blackstone is the leader.

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In its core private equity business, Blackstone hasn't had a single fund lose money since it launched its first one in 1987. The average annual returns realized by its private equity funds (19%), real estate funds (20%) and credit funds (14%) have all trounced the S&P 500, which has delivered an annualized return of 9.7% over the past 30 years.

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At 5-foot-8 with an unassuming posture and a penchant for conservative, loosely fitting suits, Schwarzman is not someone you'd expect any flashiness from. But in 2007 he ignited populist anger with a $3 million birthday bash held in New York City's Park Avenue Armory, featuring Rod Stewart, Patti LaBelle and Martin Short. He made matters worse later by comparing President Obama's threat to end the carried-interest tax preference--which lets private equity types pay capital gains rates on their income, perhaps the most indefensible tax loophole in America--to a Nazi invasion (he later apologized).



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