This week, we speak with Joan Solotar, Blackstone’s Global Head of Private Wealth Solutions. PWS manages over 100 billion dollars of the private equity giant’s $684 billion in assets. She was a highly ranked analyst and strategist, and was named an Institutional Investor “All-America Research Team.” She became Head of Research at Bank America Merrill Lynch, and is one of Barron’s 100 Most Influential Women in US Finance.
She joined Blackstone two weeks before they went public and they were less than 1,000 employees. In addition to being the largest private equity investor in the world, they are also the world’s largest real estate investor.
Solotar explains how private equity has become such a sought-after asset class: It is the combination of low bond yields, expensive stocks, and shrinking Wall Street coverage of middle-market companies. The Private Wealth Solutions group she manages provides all of the needed tools for Family Offices, Qualified and Accredited Purchasers, as well as Registered Investment Advisors (RIAs), including custodial, reporting, and communication tools.
She also explains why private equity has become an alternative to the traditional 60/40 portfolio. The search for yield has led to more interest in private structured credit as an alternative to assets like muni bonds. Beyond mere yield, real estate and structured credit with a floating rate also can provide an inflation hedge. These are not GFC-era subprime mortgages, but instead are non-traded REITs that invest in high-quality real estate. She also notes how post-GFC that banks stopped funding middle-market companies; they also hold less risk and sell off many of their loans. Blackstone has aggressively moved into serving both of these groups at scale.
She also discusses their approach to ESG: any real property they own is targeted to reduce emissions by at least 15%. In Governance, they seek to have a 30% diversity of women and people of color on BoD and in senior management.
A list of her favorite books is here; A transcript of our conversation is available here.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Robert Hormats, Managing Director at Tiedemann Advisors. Previously, he was Vice Chairman of Goldman Sachs (International), which he joined in 1982, and is the former Under Secretary of State for Economic Growth, Energy, and the Environment. We discuss his career in government and finance.
Joan Solotar’s Favorite Books
Hamnet by Maggie O’Farrell
Shoe Dog: A Memoir by the Creator of Nike by Phil Knight
Einstein: His Life and Universe by Walter Isaacson
Steve Jobs: The Exclusive Biography by Walter Isaacson
My Own Words by Ruth Bader Ginsburg
Crossing to Safety by Wallace Earle Stegner
Books Barry Mentioned
The Wright Brothers by David McCullough