As large as firms such as Blackstone, KKR, Carlyle and TPG have become, they are still headed by their founders. Navigating the transition from being a business dominated by one or two personalities to being a mature institution remains a challenge for most buyout firms.

KKR had three founders and Henry Kravis and George Roberts have run it for more than 20 years. TPG, also, had two co-heads from the outset. Blackstone more than any top firm was run by one man, and 15 years into the firm’s existence Steve Schwarzman had not groomed an heir.

In one of the most interesting episodes in the firm’s history, in 2000 Schwarzman decided to look outside, wooing Jimmy Lee, the near-legendary banker of the 1990s. But Lee got cold feet at the last minute. It was only two years later that Schwarzman found his man: Hamilton “Tony” James.

Hamilton "Tony" James

King of Capital describes the lengthy dinners over which the two men sized each other up before James agreed to join the firm.

In a piece for the Wall Street Journal’s site recently, we recount this turning point for the firm, and the lessons it offers for other buyout shops and businesses more generally.

An excerpt from the book published on Clusterstock describes Schwarzman’s unsuccessful attempt to bring Lee on board.