Jonathan Gray, recently named Blackstone’s president and COO, is now at the head of the line of the next generation of Blackstone management, the likely successor to co-founder and CEO Steve Schwarzman. Though the firm is best known for corporate private equity, Gray rose through the ranks of the real estate group, which has earned remarkable returns for fund investors.  Real estate is now bigger and generates more profit than private equity at Blackstone.

This Bloomberg BusinessWeek story explains why Gray is getting the nod.

King of Capital gives readers the inside story of how Gray beat out Vornado in a hard-fought contest to take over Equity Office Properties in 2007, and how his team sold off many of EOP’s office towers just before the real estate market crashed. EOP turned out to be one of Blackstone’s most profitable investments ever. It and Blackstone’s purchase of the Hilton hotel chain the same year — another Gray deal — earned $20 billion in profits for Blackstone’s funds.

 

 

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