Wall Street Compensation
Friday, March 23, 2007 - 2:00 pm
You are probably as weary about reading about Blackstone as we are. But this comparison is worth perusing, and we would expect all newly-minted MBA’s to take note...after all they are all about the money.
March 23 (Bloomberg)—Blackstone Group LP employees generate almost nine times more earnings than their counterparts at Goldman Sachs Group Inc., Wall Street’s most-profitable investment bank.
Each of New York-based Blackstone's 770 workers produced an average of $2.95 million in net income last year, according to documents filed yesterday with the U.S. Securities and Exchange Commission. At Goldman, the world's biggest securities firm by market value, the mean was about $360,000 in 2006. Blackstone earned $2.27 billion in 2006, 71 percent more than a year earlier. Money-management fees were $1.12 billion and investment gains totaled $7.59 billion, as the firm's private- equity funds returned more than 20 percent and its real estate investments almost doubled.
Private-equity funds continued to increase their dominant position on both ends of the domestic markets; they accounted for roughly one-fourth of M&A activity and sponsored more than 40 percent of all IPOs, with the time between purchase and sale often shrinking to mere months. No deal better symbolized the growing power of the buy side than the audacious $33 billion HCA LBO, launched by a syndicate headed by Merrill Lynch, Bain Capital and KKR.
With the buy side throwing around such huge figures, it’s small wonder that PE funds have become the first employment choice for top-tier MBAs who once would have flocked to the big banks. Dealmaker Daily
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