RITHOLTZ: So before we let you go, were going to jump to our favorite questions that we ask all of our guests, starting with you mentioned streaming, tell us what youve been watching, what keeps the family entertained? Tell us about those experiences. RITHOLTZ: You start out in California. Is this just part of the life cycle of business, or do you go through these periodic spasms where everything changes? So lets talk a little bit about the state of PE investing today. RITHOLTZ: in The Atlantic. BARATTA: were probably three times the size as we were in 2012. 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: And today, private equity has become immense compared to . RITHOLTZ: Really interesting. Its a great group of people, great organization. Were always on the 10:00 a.m. game and it was Americas team. RITHOLTZ: So heres the really interesting observation that youre making, Blackstone has boots on the ground in all these different sectors. Obviously, rates are higher, but prices seem to have come down a bit. BARATTA: But these sort of Americans were tolerated, you know? Publicly traded Blackstone . BARATTA: I had agreed to go before September 11th happened. And, you know, Ive lived in great places. The war in Ukraine, surprisingly, hasnt had a negative impact, or at least not as much as I expected in the public markets. BARATTA: I was watching the 10:00 a.m. game. Its been almost a year. The first deal we looked at was in France. BARATTA: I think people are very negative on the U.K. and . He is also a member of the firm's Management Committee and serves on many of the firm's investment committees. In London, in September, I had him come to talk about like what it means to be from where you should be deriving your happiness. Its a solution and source of a problem, sort of. And so I didnt know, you know, what finance was all about. Mr. Baratta also worked at Morgan Stanley in its mergers and acquisitions department. Were seeing maybe wage increases beginning to decline. And there are many more $10 billion companies today than there was 12 or 15 years ago. Read deeply reported stories from the largest newsroom in tech. So we share themes and we share these economic signals. BARATTA: You know, the whole notion of energy transition is a market that a decade ago, energy investors were investing in upstream oil and gas or in midstream companies. We dont spend too much time thinking about like when that might end and the ramifications of it. You had the Russia . So, yes, youre right, like, in the long run, fundamentals drive, determine share prices. Blackstone has raised the largest-ever long-hold private equity vehicle as interest in the strategy from both investors and managers increases.. Youve been there for 25 years. Blackstone's global head of private equity, Joseph Baratta is in contract to pick up a sweet 6-story townhouse from music mogul Lyor Cohen (he's Tory Burch's boyfriend), the NY Post reports.. These are physical assets. Theres really no absolutes. And so, we began to hire local people who were young in their careers. People were declaring last summer, were already in a recession. IRL Suspended CEO Shafi After Reported Pattern of Misconduct; Acting CEO Named, By Mark Matousek · April 30, 2023 2:33 PM PDT. BARATTA: I think that it changes so much fundamentally, that you cant hold on to like, you know, absolutes. Joe Baratta, welcome to Bloomberg. And we did we became more cautious. The acting is amazing. BARATTA: I just got done with Daisy Jones & The Six . Blackstone secured $8.2 billion for a second long-life offering, 70 percent more than the strategy's 2016-vintage debut fund. Ive studied finance, it was my major at Georgetown, and I was hoping to get a job somewhere, and I got a job at Morgan Stanley which way exceeded my dreams at that point. So even like undergone dusk could be successful. BARATTA: Yeah. RITHOLTZ: First of all, how did you first get involved with them? It has to be useful if you have skills. Mr. Baratta currently serves as Global Head of Private Equity and a Member of the Board of Directors of Blackstone, a leading global investment firm. RITHOLTZ: I dont want to suggest that thats what we hear. 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, right after I graduated college, I went to Georgetown in 1993. I would be remiss if I did not thank the fine team who help put this conversation together each week. BARATTA: No, its hard, and what we began to do is hire local people. You have your way. He also sits on the firms Management Committee. What was that like going over to the EU and England during that period? And so, thats what we were able to do to a large degree, is to become more conservative, to become more cautious on valuations, you know, as we started seeing evidence of inflation, and thinking that rates were probably going to go up at some point. Im not saying were clairvoyant and we handled everything perfectly. Theres real inflation. You can stream and download our full conversation, including any podcast extras, iTunes, Spotify, YouTube, Stitcher, Google, Bloomberg, and Omny. But, in general, we became much more risk averse, risk-off in that, you know, mid 2021 period. Joseph Baratta - Wikipedia I guess you kind of forget, hey, when stock prices come down enough at a certain point, that valuation becomes really attractive, if the assets themselves are productive enough. BARATTA: I think private credit has filled the hole for these smaller businesses, but really not on the full banking suite. and Merlin Entertainments Group. And in fact, I invited him to come talk to our partner group. And so, you know, that was kind of the strategy Day 1. But, you know, when I moved, you didnt have the single currency in circulation until January of 02. So what is $10 billion dollars . Receive a summary of the day's top tech newsdistilled into one email. 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. Were seeing full employment. RITHOLTZ: And everybody started drinking and we looked at each other, can we have a drink that morning? With no further ado, my discussion of private equity with Blackstones Joe Baratta. Blackstone Joe Baratta Finance Manager Boca Raton, FL INFINITI of Coconut Creek, +10 more Joe Baratta I/O Psychologist, Trustee, Vice Chair Lake Tahaoe School Board, CEO TBIG Investments. That is part of the energy transition. Kirk Falconer - January 10 2022 + Since joining Blackstone in 1998, Mr. Baratta has been involved in the execution of Blackstone's investments in Universal Orlando, Nycomed Pharmaceuticals, Houghton Mifflin, Spirit Group and was responsible for Blackstone's investments in First Eagle Investment Management . He helped to build out Blackstones PE business in Europe in 2001, moving to London in 2001. RITHOLTZ: based on whats going on. And like I said, those companies arent too big to make good returns with. RITHOLTZ: So lets talk about some of those different types of funds. RITHOLTZ: Thats quite interesting. BARATTA: technology. There werent that many firms. BARATTA: particularly this offseason, theyve done a nice job. 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. And the whole firm was maybe 200 total employees , BARATTA: not just investment people, total staff. But youre not wrong, I mean, theres different names within the individual businesses, but we all work at Blackstone. RITHOLTZ: By the way, there are a lot of different names for Blackstone. I think a big chunk of what we do over our history has been taking companies private and doing corporate carve-outs from public company, so non-core assets that a large company is divesting, family-owned businesses. 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 whole aesthetic of it is amazing. Blackstone Seeks 'Coalition' Partners to Invest Like Buffett But we can, things that are mature, things where weve realized value, sometimes were taking companies public and we can sell stock. RITHOLTZ: Really quite interesting. BARATTA: You know, I had young kids. What is energy transition? First Eagle Investment Management, you mentioned Medline earlier, Ancestry.com is probably things people are familiar with. You saw it in the financial services sector. To view recent press releases, click here. BARATTA: Yeah. So, were, were very much open for business in Europe, in the U.K. You know, the conflict has definitely been a drag to some degree in the economy, and introduces some uncertainty. So we have to work with our investors, our limited partners, other private equity firms to assemble a deal that gets much more than $10 billion of enterprise value. Switchboard:+1 (212) 583-5000. Joe Baratta, Blackstone Group LP's top private equity dealmaker, can't be too cautious right now. RITHOLTZ: So Joe Montana, Jerry Rice didnt suck you in. RITHOLTZ: And have done a pretty nice job, right? Deceptive. Were hiring summer interns now who are 19 and 20 years old. Yeah. RITHOLTZ: Yeah, supposed to be sort of loosely fashion day . BARATTA: In November of 2001, when I moved over , BARATTA: The industry wasnt called private equity; it was called venture capital and it wasnt . His current reading is here; A transcript of our conversation is available here Tuesday. Most recently he sold 85,000 units of BX stock worth $7,337,200 on 1 April 2023. The oldest executive at Blackstone Inc is BrianMulroney, 81, who is the Independent Director of the General Partner. Whats it like trying to manage a rapidly growing private business, with eventually the currencies became more or less uniform, but different languages, different customs, different culture, different ways of doing business? All of our earlier podcasts on your favorite pod hosts can be found here. Because people start so early, you have to do so much to get in college. Follow all of the fine family of Bloomberg podcasts on Twitter @podcast. But it is looking at whats more attractive and whats less attractive. 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. And so we partnered with a few local firms and actually one of our U.S. competitors to look at this big asset, because it was quite big. It changed the way we communicated with each other. Speaking on. What was it like on the private side at the end in the 90s? Blackstone 3d Amid global economic uncertainty and the ongoing recovery from COVID's systemic shock, we asked Global Head of Private Equity Joe Baratta for his perspective on the current. Before joining Blackstone, Mr.Barattawas with Tinicum Incorporated and McCown De Leeuw & Company. So thats the type of thing that a decade ago, we wouldnt have invested in. I was supposed to go over you know, in November, I ended up doing that. Joseph Baratta on the Future of Private Equity - Apple Podcasts BARATTA: that are $10 billion to $15 billion-plus enterprise value company. Maybe theyre not run that efficiently. The music is great. A Blackstone View on the Next Wave of Buyouts - LinkedIn its $619 billion in assets under management include investment vehicles focused on private equity, real estate, public debt and equity, life sciences, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis. RITHOLTZ: You dont have the same labor costs. But for listeners, you know, you dont have the same capital costs. And the cost of financing and the quantum isnt the biggest driver of our returns. So you do some really interesting work at Blackstone, including serving on a lot of portfolio companies boards. RITHOLTZ: in prices. We combined it with another one. Meet the frontrunner to lead Blackstone in Europe There were a few firms, couple of big leaders like KKR. Thats another in market that were investing in today, that maybe a decade ago, we wouldnt have been. Financial Advisors, visit our dedicated website to learn how you can partner with Blackstone. BARATTA: They had bought a bunch of educational publishing assets, including U.S. textbook company, Houghton Mifflin, back when there were actually textbooks in schools. That sounds quite fascinating. These are people who were, you know, in their late 20s, early 30s, oldest maybe mid-30s, and they kind of grew up with the firm, and they were able to be the translator, so to speak, both physically and culturally, in some of these other countries. BARATTA: Steve Schwarzman, our co-founder and CEO and chairman and, you know, amazing mentor and great businessman. So, yeah, thats been a fun thing to be in. The goal: to help bring brand . You see it in real-time across real estate, across labor . Hours Left50% Off The Information Pro Ends TonightGet Pro. RITHOLTZ: So how much of this is a function of a trend we sort of began in the 1990s? Behind the Deal Podcast: Merlin Entertainments - Blackstone My friend and former Morgan Stanley analyst, colleague, Chad Pike, ran our European real estate stuff. But youre looking at valuations and what sort of multiples you want to pay. I liked it, I thought I could build a successful career. MiB: Joe Barratta, Blackstone's Global Head of Private Equity April 15, 2023 10:00am by Barry Ritholtz This week, we speak with Joseph Baratta, who since 2012, has served as Global Head of Private Equity at Blackstone - the world's largest alternative asset manager, with $975 billion in assets under management. We bought their Climate Technologies business called Copeland. And as an asset class, theyve performed extremely well, with low incidence of loss, good returns. Mr. Joseph Patrick Baratta, also known as Joe, has been the Global Head of Private Equity at The Blackstone Group, Private Equity Group since July 2012. And then the metaverse, you know, almost came and went already, a lot of hype there. Now, the funniest story I can remember is, in these early days, when we were out trying to introduce ourselves to the local private equity firms, I went to Paris and went to Lazard Freres, which was you know, that is the bastion of, like, French establishment business. Sean Russo is my researcher. And the market hasnt loved owning manufacturing industrial-type businesses. Anything with the patents or copyright and algorithm . This net worth estimate does not reflect any other assets that Mr. Baratta may own. The whole dressing custom, yeah. Please click here if you would like more information about the cookies used on this website and how to change your cookie settings. All Rights Reserved. And heres this like schmuck from Sacramento, like, you know, 30 years old, like pitching him on why wed be a good partner for him. For information on our privacy practices see our Privacy Policy. Those do seem to be valued relatively more attractively. He is also a member of the Board of Trustees of Georgetown University; is a trustee of the Tate Foundation; and serves on the board of Year Up, an organization focused on youth employment. And I think people just need to relax, take a deep breath. RITHOLTZ: Really intriguing. BARATTA: I agree with you, I mean, 100 percent. Its where we have competitive differentiation, and its where you find better quality businesses. So its a whole broad spectrum of investing in the energy complex focused on the transition from hydrocarbons to renewable sources. So certain elements of technology, particularly in software, we think are much more attractive than they were a couple years ago, not to say they look overwhelmingly cheap, but certainly more attractive than they were. But were not seeing it. You guys seem to play across a lot of different sizes. Learn More Get subscriber-only insights and news delivered by Barry every two weeks. I mean, inflation is higher than normal, but thats going to come down. Happy to be here. RITHOLTZ: Well, the past decade, the intangibles have been super attractive. We have associated funds in Asia and an energy transition, and a long-dated vehicle that allows us to hold things for 15-plus years. We had our second real estate fund, which was I think about $1.2 billion or $1.3 billion. RITHOLTZ: Post Brexit, is that the driver? The estimated Net Worth of Joseph Baratta is at least $181 Million dollars as of 1 April 2023. And, you know, why is that? BARATTA: I think private market valuations are driven to a large degree by whats going on in the public markets. About 10 or 15 years later, we actually did work together, and he acknowledged that moment and said, God, I just thought you guys were just such jokes. Blackstone buys Clarus to bulk up in life sciences | Reuters RITHOLTZ: Theyre nice sized property, nice set group of . View stories on our mobile app and tune into our weekly podcast. RITHOLTZ: you know, 20, 25 years ago. In the last 16 years, insiders at Blackstone Inc have sold an estimated . RITHOLTZ: How did you first get involved with them? The Tate Foundation is the private philanthropic arm of the Tate that helps fund special projects, whether its exhibitions or building new buildings, you know, the big Tate Modern gallery was, in large part, funded by private donations. By the way, my wife loves the Tate Modern, one of her favorite museums. How are you looking at the investment environment today? By Andrew Ross Sorkin . BARATTA: Yeah. Signup for our newsletter to get notified about sales and new products. We actually have assets where those are going in, or were investing in components that are part of . I found this to be a fascinating conversation because Joes career has very much paralleled the growth of private equity. Is finding the back of the net the hardest job in football? The private equity firm has hired Droga5 Chief Strategy Officer Jonny Bauer as head of brand transformation for its portfolio group of more than 200 companies. BARATTA: Its a real thing in Europe. It seeks to create positive economic impact and long-term value for its investors, the companies it invests in, and the communities in which it works. RITHOLTZ: So lets talk about geographies, and lets talk about sectors. Blackstone's Joe Baratta: long-life private equity funds 'now an asset So we were materially bigger than we were 25 years ago. But, yes, thats the kind of thing were talking about. RITHOLTZ: Thats very interesting because we typically think of private equity as looking at these mature non-public companies. I have my way. . Blackstone was right on their heels back then. Focus now turns to Lionel Assant, the man widely expected to replace him at the helm of the firm's European division. RITHOLTZ: Im halfway through it, really loving it. If you enjoy this conversation, well, be sure and check out any of the previous 500 or so weve done over the past eight years. From Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life by Arthur C. Brooks. You mentioned private credit. RITHOLTZ: And you guys, your bread and butter is not forecasting the economy. Blackstone: long-life private equity funds 'now an asset class' Its one firm made unified. JOSEPH BARATTA, GLOBAL HEAD OF PRIVATE EQUITY, BLACKSTONE: Thank you. When he began, PE was a little bit of a niche boutique sort of investment, and over the ensuing 25 years, it has grown to be really a major asset class with giant opportunities that have been expressed by then small, now very large companies, of which Blackstone is one of the largest. Were coming off of a period of low inflation, low rates, and suddenly we have higher inflation and rising rates. You end up in London. RITHOLTZ: So we see a lot of hype business come along. I mean, his family dates back to like Louis Quatorze. BARATTA: I go to California all the time. What sort of new markets are you guys considering? Like, the last $30 billion deal we did, I mean, we bought Medline in 2021. RITHOLTZ: Well, so far, youre pretty interesting. The most recent stock trade was executed by Joseph Baratta on 1 April 2023, trading 85,000 units of BX stock currently worth $7,337,200. I remember completely empty plane flying over to London , BARATTA: with my then girlfriend, moving to London. BARATTA: Its certainly investable for venture investors and smaller guys who are willing to sort of dig holes in the ground and hope something comes out. I mean, at least, it was back then. BARATTA: Yes. BARATTA: you know, company-based. Just like life gets in the way and I had, you know, a cool career going and I stuck with it. We also discuss how Private Equity has developed over the past three decades from a small $50 billion alternative to a massive multi-trillion dollar investment sector. Joseph Baratta Age : 51 Public asset : 567,113,101 USD Country of residence : Unknown Linked companies : Blackstone Inc. - Merlin Entertainments plc Biography of Joseph Baratta Joseph Patrick Baratta is Director & Head-Global Private Equity at Blackstone, Inc. and on the board of 13 other companies. And the way buyouts are being financed is evolving away from syndicated big syndicated capital structures committed to by banks to now the people who are actually going to hold the risk, firms like ours and Apollo and Ares and others, who are actually lending money directly to the people who are borrowing, instead of going through the banking intermediaries. Blackstone is one of the worlds leading investment firms. Theres definitely been proof of concept for large scale institutional investors and even retail investors, that we can produce sustainable, predictable, above public market returns. 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. Its obvious in the public markets, things get frothy. And when I . BARATTA: Well, one thing that John and Steve have done is to make sure the firm is really joined up across our investment businesses. And now, I think, you know, AI could be it probably is one of those other major sea changes, where business models turning on human beings doing rote tasks, you know, probably is not the future, and a lot of businesses are going to be dislocated. BARATTA: Were not seeing evidence of it in the portfolio. For office-specific contact information, please visitour offices page. So when I looked at the world of higher rates, does it have a big impact on how you structure deals, or is it just a factor thats going to move up and down and everybody just changes their spreadsheets and the numbers all just move higher? BARATTA: where the music is amazing. All the places youve mentioned, like Germany is very different than the Switzerland . Over the last 16 years, insiders at Blackstone Inc have traded over $2,308,931,535 worth of Blackstone Inc stock and bought 906,721 units worth $30,000,792 BARATTA: Yeah. He also shares how Blackstone's approach backing companies in sectors with secular. BARATTA: And I think they nailed it. RITHOLTZ: So I really liked the first season. I dont miss a game. Joseph Baratta is an American business executive who is Global Head of Private Equity at Blackstone, a New York-based global asset management giant. BARATTA: Yeah. And in the end, we ended up just buying the U.S. textbook business, Houghton Mifflin. When did that beckon? BARATTA: Like, it probably isnt going to happen forever. 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? We were trying to figure out whether any of these assets were investable, said Baratta, global head of private equity at Blackstone, referring to media companies. Sometimes we buy things from our competitors, particularly if we think we can make them a lot bigger through acquisition or other things. Youve been listening to Masters in Business on Bloomberg Radio. Mr. Baratta joined Blackstone in 1998 and in 2001 he moved to London to help establish Blackstones corporate private equity business in Europe. And also, there are new business models, new media models. So not a lot of money, you know, get engaged in the arts and really important cultural institution; where in the U.K., its less sort of focused on the elite and more focused on like the democratization of art and culture for the people of the U.K., and I really identified with that. So thats been a really important book Ive read recently, and I think hes great. I mean, were not specifically investing in charging stations. I mean, this is the ultimate French establishment. BARATTA: even though they lost in that 81 thing. And by the time youre in your 50s, with some wisdom, you can be really good at the job. I mean, I knew nothing about finance. And so, in the early 90s, analysts had these big investment banks, Morgan Stanley, Goldman Sachs, had sort of two or three options, you can stay there and become an investment banker and do that for a career, you could go into the emerging fields of investing in private equity or in hedge funds, or you go to business school, or maybe go to business school later. RITHOLTZ: Really interesting. High-yield junk bonds still 'frothy': Blackstone - Yahoo And I think if you add it all up, we have about $40 billion of funds that were currently investing in their investment period. And we want to invest not just in digital virtual assets, but also in physical assets. BARATTA: Exactly. To view recent press releases,click here. We all wanted to get there fast, but I think its entered a new level. RITHOLTZ: Youre looking at the cost of capital and how much margin or leverage you want to assume. RITHOLTZ: You want to control and be able to set how youre going to exit or how the firm is going to be run? Not to say like we executed on that vision perfectly, I mean, we would have made some mistakes, but we definitely became much more cautious when the bull market really ramped up, in particular, post COVID, when not only did you have the low rates which the Fed double down on, you had this huge transfer payment from the federal government . So it was a beneficiary of the technology change. 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. BARATTA: I think starting with the fundamentals, you know, the economy is quite sound.
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