Steve Schwarzman on Pete Peterson

Steve Schwarzman and Pete Peterson co-founded The Blackstone Group in 1985 after Peterson had left Lehman Brothers the previous year. The initial capital to start the firm was split evenly, with $200,000 contributed by Schwarzman and $200,000 from Peterson. The two partners immediately began structuring their new venture around three core activities: M&A advisory, private equity, and waiting for new, major opportunities, a plan outlined in a letter sent to potential clients. Peterson served as chairman of the firm, while Schwarzman became the Chairman, CEO, and Co-Founder, leading the company to become the largest alternative asset management firm globally.

The professional relationship between the two individuals began when Schwarzman was working at Lehman Brothers, where Peterson was the chairman and CEO until his departure in 1984. When Schwarzman and Peterson started Blackstone, they struggled initially to gain business, with Schwarzman even answering the door himself. Although Peterson eventually retired in 2008 as Blackstone’s Senior Chairman, his involvement in the firm's early strategy and initial capitalization was foundational to its creation. The name of the firm, Blackstone, was derived from combining the German word for 'black' (Schwarzman's last name) and the Greek word for 'stone' or 'rock' (Peterson's original surname root).