JOSEPH BARATTA, GLOBAL HEAD OF PRIVATE EQUITY, BLACKSTONE: Thank you. But youre looking at valuations and what sort of multiples you want to pay. Theres nothing intimidating about those institutions, and then I knew some people who are involved. It sounds like you can scale up by partnering with lots of other PE firms. Scrutiny, Apple Drops Lawsuit Against Former Chip Executive Over IP Theft, Coinbase CEOs Pay Shrinks as Stock Slides. BARATTA: Not only post Brexit but now, you know, in this kind of world of inflation and dislocation and conflict near the continent, like all of that is conspiring, I think, to make markets look relatively attractive, in particular in the U.K., where we own a lot of assets and well continue to buy businesses. The Fed was saying, no, its transitory or whatever adjective they used. RITHOLTZ: So let me interrupt you right there. And the guy who was going over truly to lead, David Blitzer, who was a good friend and colleague, and he sort of said, geez, why dont you come and do this with me? All Rights Reserved. And in fact, I invited him to come talk to our partner group. It had a lot of momentum. And by the time theyre 30, they wanted to have, like, declared victory on their career. RITHOLTZ: after the Fleetwood Mac story, with all the cross-relationships. In the early days, do whats asked of them, do it as well as they can, and move on to the next step. So, really, in private equity, our first adventure outside of Western Europe was in India and China, and that was somewhere around 2005. BARATTA: Yeah, Im 29 when Im asked. But, in financing acquisitions and capital needs of these middle market companies, the private credit market has played an important role in that. BARATTA: So I think we just raised a small credit fund, which is $900 million, and then we had an M&A advisory business. BARATTA: Yeah. 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. Scottish & Newcastle was a big brewer up in Scotland at that time. But I dont think were going to go back to the days of 2019 to 2021. RITHOLTZ: in The Atlantic. While Qatar has reportedly spent $200 billion or more, most nations are now unwilling to spend a fraction of that on money-losing mega-events like the World Cup or the Olympics. Fintechs, beat down by the tech meltdown last year, are struggling to make good on their pitch to consumers. Big software companies including Microsoft and Salesforce are racing to incorporate the technology behind ChatGPT, known as generative artificial intelligence, into their products to attract new users and boost profits. You mentioned private credit. He also sits on the firms Management Committee. He is also a member of the Board of Trustees of Georgetown University; is a trustee of the Tate Foundation; serves on the board of Year Up, an organization focused on youth employment. Its not just like the next deal, the next promotion, the name in the paper or whatever. But wed prefer to buy things on our own, just Blackstone with our limited partners. What is energy transition? In the U.K., we own the Savoy Group of Hotels, which is the Connaught and Claridges and Savoy. Maybe theyre not run that efficiently. So thats been a really important book Ive read recently, and I think hes great. Private credit deals tend to be sold for plus. Incentive alignment in India has been a harder thing. But if we can find a great business at a reasonable price in Europe, were going to buy it. RITHOLTZ: in prices. Mr. Baratta owns 1,145,448 shares of Blackstone stock worth more than $105,312,489 as of April 20th. And I think, largely, you want to avoid highly regulated industries, where youre relying on the government to do something. RITHOLTZ: You could just access everything online as well , BARATTA: Fewer of them. Sometimes we buy things from our competitors, particularly if we think we can make them a lot bigger through acquisition or other things. 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. RITHOLTZ: Youre like late 20s at this time? Do you have the same phenomenon in the private market? But thats not really investable for us. So you move to the U.K. RITHOLTZ: Youre an hour to hop from all the key places . Hes way more interesting than me. All of our earlier podcasts on your favorite pod hosts can be found here. BARATTA: Exactly. And so, in terms of where our teams are spending time, its in and around sort of public markets. Do you have to be selfish to be a striker? RITHOLTZ: Makes a lot of sense. My friend and former Morgan Stanley analyst, colleague, Chad Pike, ran our European real estate stuff. The estimated net worth of Joseph Baratta is at least $105.31 million as of April 3rd, 2023. BARATTA: Well, in our private equity business, were spending all of our time looking at things that touch the public markets, because that is where the valuation correction, you know, is really happening, where you can transact at prices lower today than they were two years ago. RITHOLTZ: Really quite interesting. So, yes, youre right, like, in the long run, fundamentals drive, determine share prices. I know the Savoy is in the U.K. and in Europe. RITHOLTZ: And when you say Steve, for those people who may not be familiar with . First Eagle Investment Management, you mentioned Medline earlier, Ancestry.com is probably things people are familiar with. Yes. . It has to be growing. And so, yeah, and weve had limited partners in our funds whove been with us since the early 90s now and keep re-upping because we deliver a good return for their beneficiaries. And then, like I said, theyre very accessible. Fast. BARATTA: Exactly. And I wanted to work in a place that was operating at the highest level, with the smartest people, where I could learn the most, and see if I could hang, you know, so to speak, with the best. Its a solution and source of a problem, sort of. Blackstone secured $8.2 billion for a second long-life offering, 70 percent more than the strategy's 2016-vintage debut fund. RITHOLTZ: Oh, really? BARATTA: were probably three times the size as we were in 2012. RITHOLTZ: And businesses just have to exist. He is an entrepreneur, attorney, consultant, and advocate for independent investment advisers, which is a $97 trillion industry. In terms of sectors, the real value dislocations have happened in the technology industry.
Blackstone Seeks 'Coalition' Partners to Invest Like Buffett RITHOLTZ: And have done a pretty nice job, right? And so, yeah, there was a lot of volatility.
Joe Baratta, The Blackstone Group: Profile and Biography And what sort of input do you give to managements there?
Joseph Baratta - Blackstone And I thought private equity was interesting because you could live with those investments for a longer period of time. Ive been following that series . How did the buildout go for a couple of young Americans saying, hey, we want to play with this private equity thing in the EU? In this podcast, Joe and Peter discuss Blackstone's history building Merlin into a global leader, and our long-term investment plans to help the company continue to expand. RITHOLTZ: You know, when there is no alternative, people just pile into equity. BARATTA: Even more mature companies. BARATTA: Its a great building that had a beautiful collection. For press inquiries, contact [emailprotected]. Calhoun will lead Blackstone's private equity portfolio management group, which basically means that he will aid CEOs with various operational challenges. You get paid for the incremental risk that youre taking in a more leveraged capital structure. In the long run. Its obvious in the public markets, things get frothy. We bought their Climate Technologies business called Copeland. BARATTA: What weve found is that control is important in India. Like I said, theres a few fundamental enabling technologies that happen, ubiquitous broadband, internet to your house to your mobile device, which really enabled a change in retail and media models and communication models, and now this. Like, the last $30 billion deal we did, I mean, we bought Medline in 2021. 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. Clever. But it doesnt just happen like that. It is a rapidly growing economy, with a highly educated workforce, that with supply chain dynamics now moving toward Southeast Asia and India. I liked it, I thought I could build a successful career. Commitments from new limited partners, along with significant re-ups from Fund I LPs, attest to "more interest in the concept" today relative to four years ago, Baratta said. Were seeing maybe wage increases beginning to decline. This website uses cookies, including third-party cookies, in order to obtain information about your visit to the website and make this website better. Then we did other similar investments, particularly with real estate content, the pubs all own their real estate. 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. Youve been there for 25 years. And as an asset class, theyve performed extremely well, with low incidence of loss, good returns. 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. What was it like on the private side at the end in the 90s? 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. The transcript from this weeks, MiB: Joe Barratta, Blackstones Global Head of Private Equity, is below. 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 . So Im watching the Cowboys like every Sunday. Most recently he sold 85,000 units of BX stock worth $7,337,200 on 1 April 2023. RITHOLTZ: So lets talk about geographies, and lets talk about sectors. How often does a new business model come along thats really notably different from what preceded it? I do really think they nailed it. RITHOLTZ: Thats quite interesting. BARATTA: watch media, changed the way we shop, changed the way we found information. We all wanted to get there fast, but I think its entered a new level. You see it in real-time across real estate, across labor . ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. And, you know, cost structures are a little less efficient there may be than in the U.S. now. But, you know, when I moved, you didnt have the single currency in circulation until January of 02. BARATTA: I had agreed to go before September 11th happened. So its been a great asset class. I mean, this is the ultimate French establishment. The whole dressing custom, yeah. This seems to really be a potential sea change. Yeah. 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. Thats just because . It has to be useful if you have skills. Theres a little more friction in those types of industries.
Exclusive: Blackstone grooms six executives for Schwarzman's job So I wanted to get a job at a private equity firm. Be sure to check out ourMasters in Business next week with Brian Hamburger, founder of MarketCounsel and Hamburger Law Firm. And, you know, I needed to earn some money and I was adept in finance. Clearly, there was a ton of hype in crypto. Its not just power generation from those sources, but its companies that are involved in consulting, in utility services, in companies that make components that are helping electrify the economy, in electric vehicles or in HVAC systems.
Joe Baratta to Join Blackstones Board of Directors There are 23 older and 2 younger executives at Blackstone Inc. BARATTA: I go to California all the time. RITHOLTZ: Theyre nice sized property, nice set group of .
Joseph Baratta | Year Up So given the change in size of private equity over the past 25 years, is there a sweet spot? 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. Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Joe Baratta - Private Equity - Blackstone | LinkedIn BARATTA: even though they lost in that 81 thing. But in the moment, it was less wonderful. Monitor your investments 24 hours a day, around the clock from around the globe. BARATTA: Were not seeing evidence of it in the portfolio.
Elon Musk May Yet Meet Twitter Executives in Court - New York Times BARATTA: Yes. So taking advantage of the currency declining, a lower cost base in India, but revenues denominated in dollars or euros. And so, were trying to find the businesses that are going to be enabled and benefited by AI, and avoid the things that are going to be dislocated. Previously, Mr. Baratta served as the Senior Managing Director at the Blackstone Group, Private Equity Group. RITHOLTZ: Yeah, supposed to be sort of loosely fashion day . From 2004 until 2010, we were having babies, and one of the places we would always go is either Tate Britain or Tate Modern. RITHOLTZ: But youre not dealing with startups; youre dealing with . The first deal we looked at was in France. BARATTA: that are $10 billion to $15 billion-plus enterprise value company. Sebastian Escobar is my audio engineer. I thought the conversation was quite fascinating, and I think you will as well. BARATTA: Roger Staubach, Tony Dorsett, Tony Hill, those guys. BARATTA: You had stuff going on in Latin America. And we were kind of oddities at that time, particularly in private equity which was still really in its infancy. BARATTA: I agree with you, I mean, 100 percent. 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. Thats why I joined Blackstone, it was one of the leading firms in that moment. And they had like bottles of Bordeaux on the conference room table. RITHOLTZ: So youre anticipating one of the questions Im going to ask you, which I might as well bring it up now. So we operate from a board level and really focus on key strategic and risk management variables. Even when you read that announcement from that was 2012 . Now, in that moment, Americans were sort of viewed positively and as neutral. You had Lehman almost go bust, I think, around that time for maybe the first or second time. Blackstone (NYSE:BX) today announced that Joe Baratta, the firm's Global Head of Private Equity, will join its board of directors. And by the time youre in your 50s, with some wisdom, you can be really good at the job. 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. 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. And really, most of our expansion started with our real estate business, because its a little bit easier to expand globally in real estate because its more asset-based rather than like .
MiB: Joe Barratta, Blackstone's Global Head of Private Equity He helped to build out Blackstones PE business in Europe in 2001, moving to London in 2001.