Transcript: Joe Barratta of Blackstone



The transcript from this week’s, MiB: Joe Barratta, Blackstone’s Global Head of Private Equity, is below.

You can stream and download our full conversation, including any podcast extras, iTunes, Spotify, Stitcher, Google, Bloomberg, and Omny. All of our earlier podcasts on your favorite pod hosts can be found here.


ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest, Joe Baratta is the Global Head of Private Equity at PE giant Blackstone, where he has worked since 1998. I found this to be a fascinating conversation because Joe’s career has very much paralleled the growth of private equity. 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.

He is very familiar with everything from M&A to credit, to real estate, on and on, and has had experiences both in the U.S. and overseas, really a global perspective on what took place in private equity in the past and what the future looks like. I thought the conversation was quite fascinating, and I think you will as well.

With no further ado, my discussion of private equity with Blackstone’s Joe Baratta. Joe Baratta, welcome to Bloomberg.


RITHOLTZ: Happy to have you. Let’s start out with just a little background on your career. You began more or less in the M&A space at Morgan Stanley, is that right?

BARATTA: Yeah, right after I graduated college, I went to Georgetown in 1993. I got an analyst job at Morgan Stanley in the M&A group, and that’s kind of two-year training program and I did that and that was painful.

RITHOLTZ: I can imagine. It sounds like a good background for someone who eventually ends up buying companies.

BARATTA: Yeah. I mean, I knew nothing about finance. I grew up in Sacramento, California. My dad was a bodybuilder and owned three gyms in Sacramento.


BARATTA: Yeah. And so I didn’t know, you know, what finance was all about. I had never been to New York City till I was, I think, 20 years old, and I had some roommates who grew up in New York City who’ve gone to Dalton High School here, so completely different world. And when I —

RITHOLTZ: To say the least.

BARATTA: Yeah. When I came to the city, I was like, wow, this place is amazing. And, you know, I needed to earn some money and I was adept in finance. I’ve 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.

RITHOLTZ: So eventually you leave Morgan Stanley, you ended up at Tinicum Incorporated and McCown De Leeuw & Company. I’m assuming these are both related M&A-type —


RITHOLTZ: — firms or private equity firms?

BARATTA: Yeah. The first job for Morgan Stanley was McCown De Leeuw. 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. I really wanted to learn how to invest money, not just be an advisor, and I thought private equity was cool because you weren’t at the whim of the market.

You know, in the market, it’s like if you start at the wrong time, if you’re wrong for a few quarters, like, boom, like the career is abbreviated. And I thought private equity was interesting because you could live with those investments for a longer period of time. You had a longer period of time to figure out if you were right or not. And I think fundamentals mattered more in private equity than they did in public market investing. So I wanted to get a job at a private equity firm.

RITHOLTZ: I wonder, do fundamentals matter more, or is it really just a question of how far away from fundamentals can public equities get, either to the upside or the downside where it creates some form of opportunity, which kind of raises the question, how closely do private market fundamentals track what’s going on in the public markets?

BARATTA: Yeah. In the long run. they do. In the short run, there can be distortions in public market valuations as we saw in 2001 and we saw prior to that in 2007, and prior to that in 2000, in ‘99. So, yes, you’re right, like, in the long run, fundamentals drive, determine share prices. In private equity, you know, we’re owning things for 5, 6, 10 years and we’re not subject to, like, the vicissitudes of the market in the short run. We never have to sell, only when we want to because we control the companies. And to me, that was a more comfortable form of investing and where I wanted to bet my career.

RITHOLTZ: So you end up at Blackstone in 1998, at a time when public equity prices became a little unmoored and we’re on the way up to a real bubble. What was it like on the private side at the end in the ‘90s?

BARATTA: Yeah. I started at Blackstone in July of ’98, and I guess what was going on that year, you had like a Southeast Asian currency crisis.


BARATTA: You had stuff going on in Latin America. You had the Russia —

RITHOLTZ: You had the Russian. Right.

BARATTA: — crisis. You had Lehman almost go bust, I think, around that time for maybe the first or second time. And so, yeah, there was a lot of volatility. Private equity was still, I’d say, in the first phase of its existence, and Blackstone was one of them. That’s why I joined Blackstone, it was one of the leading firms in that moment. It had a lot of momentum. I think they were operating at the really top of the industry, really smart people, good track record. At that point in my career, I was 20 — I think 27 years old, I wanted to attach my myself to a firm that I thought really had a lot of growth potential, where I could learn from the best people in the industry, and that certainly was what I found there.

RITHOLTZ: And today, private equity has become immense compared to —


RITHOLTZ: — you know, 20, 25 years ago. We’ll talk a little bit about your time in London later. But I love the announcement when you were promoted to Global Head of PE from Blackstone, they said the 73 investments and pending deals you’re involved, and combined for $117 billion in revenue, the equivalent of the 13th largest company by revenue on the Fortune 500 list. Meaning, your team, your group would be a Fortune Top 20 Company.


RITHOLTZ: Tell us what that growth has been like over the past 25 years? It seems a house of fire.

BARATTA: Yeah. When I started at Blackstone, I think we’ve just started investing our third private equity fund. It was about $3 billion in total size. We had our second real estate fund, which was I think about $1.2 billion or $1.3 billion.


BARATTA: So I think we just raised a small credit fund, which is $900 million, and then we had an M&A advisory business. And the whole firm was maybe 200 total employees —


BARATTA: — not just investment people, total staff. And today, we’re knocking on the door of 5,000. I think we’re 4,500 —

RITHOLTZ: Amazing.

BARATTA: — or something like that. And the size of our private equity business is — you know, we’re now on our ninth fund. 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. And I think if you add it all up, we have about $40 billion of funds that we’re currently investing in their investment period. And the total AUM of our private equity business, AUM assets under management is roughly $80 billion, $90 billion. So we were materially bigger than we were 25 years ago. Even when you read that announcement from — that was 2012 —

RITHOLTZ: 2012. Yeah.

BARATTA: — we’re probably three times the size as we were in 2012. Both in terms of the aggregate revenue of our company, size of our portfolio, we’re probably now something like 150 total investments, many hundreds of billions of revenue, hundreds of thousands of employees if you add up all of the companies in which we’re invested. So it’s been really significant growth. And, you know, why is that? I think because the private equity investing model has been really good for our clients, which are state pension plans, sovereign wealth funds, you know, ensuring the retirement safety of many — tens of millions of people.

RITHOLTZ: So you’re anticipating one of the questions I’m going to ask you, which I might as well bring it up now. Over that 25-year period or even the past decade where you’ve tripled in size, it’s more than just quantitative. It seems like private equity is qualitatively different than it was back in the early days. Is this simply becoming institutionalized, or has the asset class been validated and now people are treating it differently than they did in the ‘90s where it was kind of a small niche —


RITHOLTZ: — backwater? Am I exaggerating that at all or —

BARATTA: No, no. It was more of a cottage industry. There were a few firms, couple of big leaders like KKR. Blackstone was right on their heels back then. But it’s nothing like it is today. It is an institutionalized asset class. There’s definitely been proof of concept for large scale institutional investors and even retail investors, that we can produce sustainable, predictable, above public market returns. And we’ve become better at what we do in buying control of companies, engaging with them, making them better, helping them grow. And so, yeah, and we’ve had limited partners in our funds who’ve been with us since the early ‘90s now and keep re-upping because we deliver a good return for their beneficiaries.

RITHOLTZ: So let’s talk about some of those different types of funds. You mentioned private credit. You mentioned real estate, private equity, M&A. What is energy transition? That sounds quite fascinating.

BARATTA: Yeah. Energy has been a major investment theme across many of our businesses in credit and corporate private equity. And for the last six or seven years, the way we’ve been expressing investing in energy is an energy transition, so in companies that are helping accelerate the transition from burning hydrocarbons to produce electricity and energy, to renewable sources. And so, in private equity —

RITHOLTZ: Renewable meaning wind, solar, nuclear, whatever?

BARATTA: Wind, solar, electrifying the economy, getting off of oil and gas, and it’s all kinds of companies engaged. It’s not just power generation from those sources, but it’s companies that are involved in consulting, in utility services, in companies that make components that are helping electrify the economy, in electric vehicles or in HVAC systems. So it’s a whole broad spectrum of investing in the energy complex focused on the transition from hydrocarbons to renewable sources.

RITHOLTZ: We take for granted totally that you’re out in a car, you can pull over anywhere and tank up with gas. It feels like we’re very early stages of transitioning to being able to pull up somewhere and spend 10 minutes charging the car to get you another 100 miles or so. Is that the sort of infrastructure we’re talking about in addition to all the obvious ones we’ve been mentioning?

BARATTA: Yeah, that’s part of it. I mean, we’re not specifically investing in charging stations. We actually have assets where those are going in, or we’re investing in components that are part of —


BARATTA: — manufacturing those facilities. But, yes, that’s the kind of thing we’re talking about. That is part of the energy transition.

RITHOLTZ: And you had mentioned private credit before, that seems to have been a giant growth area, especially when rates were at zero, when people aren’t seeing a whole lot of returns from fixed income.

BARATTA: Well, yeah, the private credit market I think is really attractive, and it’s actually been around a long time. I mean, there have been leveraged loans and high yield bonds since the 1980s. And as an asset class, they’ve performed extremely well, with low incidence of loss, good returns. You get paid for the incremental risk that you’re taking in a more leveraged capital structure. So it’s been a great asset class. It’s attracted a lot of capital.

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.

RITHOLTZ: So how much of this is a function of a trend we sort of began in the 1990s? As companies got larger and larger, it seemed like banks went upscale with them and left sort of a gaping void in the middle, where, you know, mid-market companies didn’t have a merchant bank that could facilitate loans, credit, anything —


RITHOLTZ: — along those lines.

BARATTA: I think private credit has filled the hole for these smaller businesses, but really not on the full banking suite. There’s plenty of great smaller banks whose business strategy is to serve smaller and medium-sized businesses. But, in financing acquisitions and capital needs of these middle market companies, the private credit market has played an important role in that. Yeah.

RITHOLTZ: Really quite interesting.


RITHOLTZ: Let’s talk a little bit about your career at Blackstone. You’ve been there for 25 years. That’s a pretty good run. What attracted you to them in 1998 when they were still kind of a modest, small firm?

BARATTA: Yeah. I mean, I was in my mid-20s and, you know, looking to build a career in private equity. I liked it, I thought I could build a successful career. I recognized that it was still pretty early in the development and there should be a lot of growth in these firms. And I wanted to work in a place that was operating at the highest level, with the smartest people, where I could learn the most, and see if I could hang, you know, so to speak, with the best.

RITHOLTZ: Keep up with the dogs?


RITHOLTZ: Is that how you’re thinking?

BARATTA: And I had very modest expectations like, geez, if I can last two or three years, at least I will have done it. I will learn something, and I’ll have something else to do on the other side of it.

RITHOLTZ: So you lasted two or three years, and then you get tapped to go to London in 2001. That had to be a giant challenge, especially given what was taking place. The dot-com had just imploded. It wasn’t very long after the handover of Hong Kong to China, like a lot of things were changing in both the U.K. and Europe. What was that like going over to the EU and England during that period?

BARATTA: Yeah. I mean, it was certainly not expected. I’d never lived abroad. I think I’d been to London — I’m not even sure I’d been to London. I’d been to, like, Paris and Venice or something. And the guy who was going over truly to lead, David Blitzer, who was a good friend and colleague, and he sort of said, geez, why don’t you come and do this with me? He was the senior guy at that time. And I was like, geez, okay, well —

RITHOLTZ: You’re like late 20s at this time?

BARATTA: Yeah, I’m 29 when I’m asked. I’m 30 when I moved, you know, yeah, because it was 2001 and, you know, it was just after September 11th.


BARATTA: I had agreed to go before September 11th happened. I was supposed to go over — you know, in November, I ended up doing that. I remember completely empty plane flying over to London —


BARATTA: — with my then girlfriend, moving to London. I had no language skills. The firm had had —

RITHOLTZ: Do you need language skills in England, or is it —

BARATTA: Not in England, but —

RITHOLTZ: But you’re still dealing with a lot of European at that time.


RITHOLTZ: I’m not being sarcastic. You’re still dealing with people in Brussels, and people in Paris, and people in Milan. It has to be useful if you have skills.

BARATTA: No. Of course, I mean, France, Germany, Italy, Spain, you know, the whole Nordic region, Sweden, they’re not —

RITHOLTZ: To say nothing of two people separated by a common language, right?

BARATTA: Exactly. Now, in that moment, Americans were sort of viewed positively and as neutral. So, you know, you could go to France, maybe they didn’t love, you know —

RITHOLTZ: Anybody.

BARATTA: — Germans as much.


BARATTA: But these sort of Americans were tolerated, you know? And we were kind of oddities at that time, particularly in private equity which was still really in its infancy.


BARATTA: In November of 2001, when I moved over —


BARATTA: The industry wasn’t called private equity; it was called venture capital and it wasn’t —

RITHOLTZ: Oh, really?

BARATTA: — technology. Venture capital was the nomenclature for everything that was basically a private investment.

RITHOLTZ: But you’re not dealing with startups; you’re dealing with —

BARATTA: Correct.

RITHOLTZ: — more established businesses.

BARATTA: Even more mature companies. Yes. But, you know, when I moved, you didn’t have the single currency in circulation until January of ’02.


BARATTA: So there were still French francs and, you know, lira, and German Deutsche Marks. And so, that didn’t happen until 2002. It took a year for all those local currencies, literally paper and coin currencies, to come out of circulation and have euro bills.

RITHOLTZ: So really a period of transition and —


RITHOLTZ: — you’re stepping right into the thick of it?

BARATTA: Right into the thick of it, trying to figure out what a two younger might — my colleague, David Blitzer, I think he was maybe 31. I was 29. And there, we were two young Americans, no language skills, like what are we supposed to do?

Now, the firm had assets. In the U.K., we own the Savoy Group of Hotels, which is the Connaught and Claridge’s and Savoy.

RITHOLTZ: They’re nice sized property, nice set — group of —

BARATTA: Yeah, which is good asset —


BARATTA: — and nice calling card. We had actually two investments in Germany in telecom infrastructure that in that moment, we’re doing that great. And so we did, but we were kind of trying to do deals by airplane from New York, and that’s not functional.


BARATTA: So Steve said, we got to have real presence. We have some assets. We had some real estate guys there. My friend and former Morgan Stanley analyst, colleague, Chad Pike, ran our European real estate stuff. And David and I moved over to do the private equity stuff.

RITHOLTZ: And when you say Steve, for those people who may not be familiar with —

BARATTA: Sorry. Sure.

RITHOLTZ: — tell us about Blackstone’s boss.

BARATTA: Steve Schwarzman, our co-founder and CEO and chairman and, you know, amazing mentor and great businessman.

RITHOLTZ: Who, by the way, we were supposed to have on the show, and a little thing called COVID came along and interrupted us, like, literally, that end of March, beginning of April, when his book came out —



BARATTA: Well, you have to get him back. He’s way more interesting than me.

RITHOLTZ: Well, so far, you’re pretty interesting. So you’re raising the bar. So you move to the U.K.


RITHOLTZ: You’re an hour to hop from all the key places —


RITHOLTZ: — in Europe. 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?

BARATTA: Yeah. So our strategy was, and sort of David had conceptualized, like, we’re going to be the neutral Americans who can work with the local European firms to help them get deals done. So we kind of went on, did some missionary work, meeting the local private equity firms in France and, of course, in the U.K., in Germany, up in the Nordic region, in Italy, and we just met all the other players. It was a small industry. There weren’t that many people. There weren’t that many firms. And we were like, look, we’d be great partners as you’re looking at assets.

The first deal we looked at was in France. We were looking at taking — remember the Vivendi at that time?


BARATTA: The media conglomerate?


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.



RITHOLTZ: There’s still textbooks in schools.


RITHOLTZ: You could just access everything online as well —


RITHOLTZ: — if you want.

BARATTA: Fewer of them. Yeah. 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. And in the end, we ended up just buying the U.S. textbook business, Houghton Mifflin. That was our first deal in Europe, which was actually a U.S. deal, but we probably wouldn’t have done it had we not been there —


BARATTA: — looking at the divestiture from Vivendi. And so, you know, that was kind of the strategy Day 1. And then it evolved. You know, I sort of looked at, well, the industry in Europe is a good decade or two behind the U.S. So I said, well, what kind of deals worked in the U.S. in the early ‘90s, in my experience? And, you know, what I sort of decided as well, fragmented industries, where you could drive consolidation that had happened already in the U.S., things like, in the U.K., pubs. There was a big consolidation and lots of divestitures of pubs that were owned by brewers in the time, and there were rules came down that brewers can own distributors.

RITHOLTZ: Similar to U.S. antitrust rules —

BARATTA: Exactly.

RITHOLTZ: — and they then diversify and — or I’m sorry, they made them divest those vertically integrated holdings?

BARATTA: Exactly. So the second deal we did was we worked with another firm, a local U.K. firm called CVC and also TPG to buy Scottish & Newcastle’s pub divestiture. Scottish & Newcastle was a big brewer up in Scotland at that time. And so, we bought the pub business. We combined it with another one. We bought some more, and that was a pretty successful investment. Then we did other similar investments, particularly with real estate content, the pubs all own their real estate. So we were working with our real estate guys in health care facilities, and visitor attractions, and theme parks. So we did a lot of these sorts of consolidation place.

RITHOLTZ: A broad spectrum of different holdings. One of the things that I have to follow up with is how important was it partnering with local other investors and other VCs or PEs? I don’t know what they call themselves back then.

BARATTA: VCs at that time.


BARATTA: But they were private equity. Yeah.

RITHOLTZ: How important was it finding a local partner to, you know, hook up with them and be able to participate in deals with?

BARATTA: I think early on, it was important until we established ourselves, and then we did less of that. We started doing deals on our own. Probably somewhere around 2004 or ‘05, we started doing things by ourselves. We were much more networked. You know, people knew who we were. Blackstone, as a brand name, was becoming more known just everywhere, but in particular in Europe, because we weren’t particularly well known at that time. And so, yeah, it was helpful. It kind of helped us get off the ground, so to speak.

RITHOLTZ: And so you guys are expanding in the 2000s in Europe. When did Blackstone start to look at Asia? When did that beckon?

BARATTA: I think it was 2005, when we started to look at in China and in India, in particular, and also Japan. And really, most of our expansion started with our real estate business, because it’s a little bit easier to expand globally in real estate because it’s more asset-based rather than like —


BARATTA: — you know, company-based. And so we sort of followed our real estate colleagues, where they went and establish a toehold, became successful. So, really, in private equity, our first adventure outside of Western Europe was in India and China, and that was somewhere around 2005.

RITHOLTZ: Really quite interesting. I have to point out that your life history is a series of ever-worsening weather.

BARATTA: I know.

RITHOLTZ: You start out in California. You go to D.C. You go to New York. You end up in London. So warm sunshine, no interest?

BARATTA: I don’t know. No, I mean, I —

RITHOLTZ: Or just take it for granted?

BARATTA: I go to California all the time.


BARATTA: I got a lot of good friends from high school. And, you know, I grew up at the foothills of the Sierra Nevada Mountains, and I love to go there. But I can’t explain it. Just like life gets in the way and I had, you know, a cool career going and I stuck with it. And, you know, I’ve lived in great places. I’ve been super lucky to have these fun adventures, whether or not with Stanley.

RITHOLTZ: So let’s talk a little bit about some of those places. Your base of operations when you’re in the U.K. is London, but you’re back and forth to multiple countries. What’s 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 the places you’ve mentioned, like Germany is very different than the Switzerland —


RITHOLTZ: — which is very different than the Nordic countries. How do you keep all that straight?

BARATTA: No, it’s hard, and what we began to do is hire local people. So one of our first hires, now, the man who runs our business in Europe, we hired this guy, Lionel Assant, who’s French, and we hired Germans. For a brief while, we had an office in Hamburg. We hired an Italian for the firm, Andrea Valeri. And so, we began to hire local people who were young in their careers. 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.

RITHOLTZ: Any memorable snafus, either —


RITHOLTZ: — culturally or language-wise, when you’re up — you know, when you’re bouncing from — you know, you go to Frankfurt to Denmark, two totally different worlds.

BARATTA: Yeah. 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. And they had like bottles of Bordeaux on the conference room table. I mean, you know, this is probably 2002. And they introduced me to — and I won’t name names, he’s a wonderful guy. But in the moment, it was less wonderful. They introduced me to the head of a significant private equity firm in Europe.

And I was doing my pitch, so here I am, 30 years old. He’s probably 42 or 43. I’m doing my pitch on Blackstone and we’re good friends. We don’t have an ego and, you know, we can help facilitate transactions, whatever, U.S. perspective and global perspective. And the guy looks at me like I had, you know, two horns coming out of my head, who’s his young American? Why am I talking to him? I mean, his family dates back to like Louis Quatorze. I mean, this is the ultimate French establishment. And here’s this like schmuck from Sacramento, like, you know, 30 years old, like pitching him on why we’d be a good partner for him. And he was, you know, in that moment, completely dismissive.

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. But we ended up being — you know, that was an example of, like, I just think we were discounted, but it was really early in the development of private equity. So even like undergone dusk could be successful.

RITHOLTZ: I was waiting for you to say, and it was 10:00 a.m. and they broke open the bottles of Bordeaux.

BARATTA: Well., they definitely did that.

RITHOLTZ: And everybody started drinking and we looked at each other, can we have a drink that morning?

BARATTA: That was very — yeah, and you couldn’t wear brown shoes. You could only wear black shoes. You weren’t taken seriously.

RITHOLTZ: Is that true?

BARATTA: Yeah. The whole dressing custom, yeah.

RITHOLTZ: You know, we’re both sitting here —


RITHOLTZ: — in blazers without ties.

BARATTA: Yeah. Look at that.

RITHOLTZ: Who wear ties? Who cares about brown shoes? What is —

BARATTA: It’s a real thing in Europe. I mean, at least, it was back then.

RITHOLTZ: It is (inaudible).

BARATTA: Yes. Brown shoes that are for like, you know —


BARATTA: — shooting or something.

RITHOLTZ: Oh, really?


RITHOLTZ: I never would have guessed that.


RITHOLTZ: Really quite interesting.


RITHOLTZ: By the way, there are a lot of different names for Blackstone. I’ve heard people say Blackstone, Blackstone Group, Blackstone Partners. I know there are lots of different funds. I’m assuming that all these different names all come from different work products, different strategies, different funds, or is just everybody getting this wrong?

BARATTA: Yeah. No, no, that’s — I mean, the firm is called Blackstone, period. And within Blackstone, our private equity funds are called Blackstone Capital Partners. In the real estate, it’s Blackstone Real Estate Partners, and then there are variants on that theme. But you’re not wrong, I mean, there’s different names within the individual businesses, but we all work at Blackstone. It’s one firm made unified.

RITHOLTZ: Makes a lot of sense. So let’s talk a little bit about the state of PE investing today. We’re coming off of a period of low inflation, low rates, and suddenly we have higher inflation and rising rates. What sort of a challenge does that present for private markets?

BARATTA: Yeah. Well, if you do this — if you’ve been doing this long enough, which fortunately, I have, since really 1095, you see different cycles, and you see what happens when capital becomes cheap and money becomes easy, and interest rates are lower, not really a factor. Valuations go up and you saw it, of course, in the late ‘90s, in the tech sector. You saw it in the financial services sector. In 2006, ’07, ’08, you saw the financial crisis.

RITHOLTZ: Real steady (ph) —

BARATTA: And so, as we were watching the Feds reaction to the financial crisis, pushing rates down and keeping them down, we’re like, geez, this probably is not going to last forever, and that doesn’t seem to be the natural state of affairs.


BARATTA: A growing economy, zero cost to capital, markets compounding at 15, 16, 17 percent.

RITHOLTZ: What could go wrong?

BARATTA: Like, it probably isn’t going to happen forever. And so, you know, my base case was that it wouldn’t and you’d have like called it wonkily like mean reversion in global cost of capital, which means rates would go up, market risk premiums would go up, you know, PE multiples would come down, credit spreads would probably gap out. 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 —


BARATTA: — into people’s pocketbooks, which massively accelerated the economy and rates stayed low. And then we started seeing significant signs in inflation, particularly in our real estate business, with rents going up significantly, wages going up across our private equity portfolio, beginning to see pricing power for many of our companies that they hadn’t had in a long time. And we’re like, whoa, this is the sign, like this is the canary in the coal mine.

There’s real inflation. The Fed was saying, no, it’s transitory or whatever adjective they used. And we did — we became more cautious. And so, I’m proud of how we navigated that cycle, and I think we’re in a more normal world. To me, this world is normal, not abnormal, with, you know, positive real interest rates. I mean, inflation is higher than normal, but that’s going to come down. But I don’t think we’re going to go back to the days of 2019 to 2021.

RITHOLTZ: So here’s the really interesting observation that you’re making, Blackstone has boots on the ground in all these different sectors. You see these things before they start to show up in the economic data. You see it in real-time across real estate, across labor —


RITHOLTZ: — across all these different inputs. How do you use all of this data that’s generated by all of your portfolio companies to navigate the world at large?

BARATTA: Well, one thing that John and Steve have done is to make sure the firm is really joined up across our investment businesses. So we share themes and we share these economic signals. And so. at the top of the firm, you know, Steve, John, a few others of us who are on the management committee are really able to push down into the organization like what we’re seeing and to change investment behaviors. And so, that’s 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.

Again, we’re not perfect. I’m not saying we’re clairvoyant and we handled everything perfectly. But, in general, we became much more risk averse, risk-off in that, you know, mid 2021 period.

RITHOLTZ: So it’s not like the public markets where you could say sell here, buy there, because you have such obvious prints —


RITHOLTZ: — in prices. But you’re looking at valuations and what sort of multiples you want to pay.


RITHOLTZ: You’re looking at the cost of capital and how much margin or leverage you want to assume. So when you’re adjusting your investment posture, you’re basically saying we’re going to take more risk or less risk —


RITHOLTZ: — based on what’s going on. So, clearly, that was a great time to pull back in mid-2021.

BARATTA: And we sold what we could —


BARATTA: — I mean, as much as we could. You know, to your point, like it’s hard to turn on a dime and say, sell the whole portfolio. We can’t do that. But we can, things that are mature, things where we’ve realized value, sometimes we’re taking companies public and we can sell stock.


BARATTA: We leaned into exiting what we could in that period.

RITHOLTZ: So here we are, enter the first quarter 2023, what’s the environment look like relative to mid-2021? Obviously, rates are higher, but prices seem to have come down a bit. How are you looking at the investment environment today?

BARATTA: I think starting with the fundamentals, you know, the economy is quite sound. We’re seeing in our businesses real stability across most sectors.

RITHOLTZ: So let me interrupt you right there. I’ve been hearing recession chatter it seems like for six months, at least. Sounds like you guys aren’t aggressively in the, we’re in a recession or about to have a recession six months. It’s been almost a year. People were declaring last summer, we’re already in a recession. I’m assuming you guys —

BARATTA: We’re not seeing evidence of it in the portfolio. I mean, there is some degree of like heightened caution concern, because when you do take rates up and really tighten financial conditions, there are consequences in the economy at some point. But we’re not seeing it. We’re seeing maybe wage increases beginning to decline. So the rate of increases is declining.

We’re seeing some companies have less pricing power maybe than they had a year ago. But we’re seeing solid demand. We’re seeing full employment. We still continue, in many of our companies, to struggle to fill open roles. So, overall, the picture we see is of a reasonable economy, with some risks to the future, but I don’t — whatever recession we may have, I don’t think is going to be really significant.

RITHOLTZ: And you guys, your bread and butter is not forecasting the economy.


RITHOLTZ: I don’t want to suggest that that’s what we hear. But it is looking at what’s more attractive and what’s less attractive.


RITHOLTZ: So let’s talk about geographies, and let’s talk about sectors. What’s appealing?

BARATTA: Well, in our private equity business, we’re spending all of our time looking at things that touch the public markets, because that is where the valuation correction, you know, is really happening, where you can transact at prices lower today than they were two years ago. And so, corporate carve-outs, public to private, you know, the last few deals we’ve done, a bit of large corporate carve-out from a large important American corporate, Emerson. We bought their Climate Technologies business called Copeland. We recently announced to take private of a technology company called Cvent, which is publicly traded. And so, in terms of where our teams are spending time, it’s in and around sort of public markets.

RITHOLTZ: That’s very interesting because we typically think of private equity as looking at these mature non-public companies. 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: Yeah. 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. Sometimes we buy things from our competitors, particularly if we think we can make them a lot bigger through acquisition or other things. But that’s not uncommon to see private equity firms taking companies private and transacting with public companies.

In terms of sectors, the real value dislocations have happened in the technology industry. 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. I think that also there’s a bunch of businesses that are manufacturing things that must exist in the physical world, you know, to cool or heat the environment, food, the distribution of essential medical products, whole energy transition. These are physical assets. And we want to invest not just in digital virtual assets, but also in physical assets. And the market hasn’t loved owning manufacturing industrial-type businesses. Those do seem to be valued relatively more attractively.

RITHOLTZ: Well, the past decade, the intangibles have been super attractive. Anything with the patents or copyright and algorithm —


RITHOLTZ: — underneath it, because you don’t have this obviously, and I’m not going to teach you about the private equity business. But for listeners, you know, you don’t have the same capital costs.


RITHOLTZ: You don’t have the same labor costs. There’s a scalability there that you don’t get in the real world, which probably is why a lot of real-world assets eventually become attractively priced.


RITHOLTZ: Is that a fair way to —


RITHOLTZ: And businesses just have to exist.


RITHOLTZ: What about geographies? Where are you looking around the world? What’s an attractive place that people probably overlooked?

BARATTA: I think people are very negative on the U.K. and —

RITHOLTZ: Post Brexit, is that the driver?

BARATTA: Not only post Brexit but now, you know, in this kind of world of inflation and dislocation and conflict near the continent, like all of that is conspiring, I think, to make markets look relatively attractive, in particular in the U.K., where we own a lot of assets and we’ll continue to buy businesses.

India is very attractive. It is a rapidly growing economy, with a highly educated workforce, that with supply chain dynamics now moving toward Southeast Asia and India. We’ve had a big business there for a long time and we see really attractive assets.

RITHOLTZ: Let me ask you about India because it feels like, at least, in the public markets, India is always on like a year or two away from being the next big thing and it just hasn’t seemed to happen. What are the challenges of investing in a place like India?

BARATTA: What we’ve found is that control is important in India. You know, you want to be able to control the exit. You want to be able to ensure that you’re bringing in best-in-class management that’s really perfectly aligned with you. You know, economically, that’s a big thing. Incentive alignment in India has been a harder thing. And I think, largely, you want to avoid highly regulated industries, where you’re relying on the government to do something. There’s a little more friction in those types of industries.

And so, we’ve 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. So taking advantage of the currency declining, a lower cost base in India, but revenues denominated in dollars or euros.

RITHOLTZ: Really interesting. The war in Ukraine, surprisingly, hasn’t had a negative impact, or at least not as much as I expected in the public markets. How are you looking at a geopolitical event like that affecting, you know, what’s taking place on the continent?

BARATTA: Yeah. We don’t spend too much time thinking about like when that might end and the ramifications of it. We do think, at some level, it does affect the cost structures. You know, energy prices are higher. Inflation is significant. And, you know, cost structures are a little less efficient there may be than in the U.S. now. So, we’re, we’re 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. But if we can find a great business at a reasonable price in Europe, we’re going to buy it.

RITHOLTZ: Really interesting. We talked earlier about inflation and rising rates. Private credit deals tend to be sold for plus. 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 that’s going to move up and down and everybody just changes their spreadsheets and the numbers all just move higher?

BARATTA: I mean, there’s no question that financing costs are higher, both debt and equity, which is a healthy thing because I think the global cost of capital was too low, induced by super low rates and capital allocation to riskier assets, institutional investors chasing return.

RITHOLTZ: You see that on the private market? It’s obvious in the public markets, things get frothy.


RITHOLTZ: You know, when there is no alternative, people just pile into equity. And for a while, it looked like the lower quality the stock was, the better it did. Do you have the same phenomenon in the private market?

BARATTA: I think private market valuations are driven to a large degree by what’s going on in the public markets. So if your alternative, as a company, is to go public at a given price, you’re probably not going to sell it to a private equity firm at a much lower price. So, yes, private equity valuations are influenced very significantly by what’s going on in the public markets. That’s why, as an investor, I’m much happier today because we’re able to buy things more cheaply.

And the fact that financing costs are higher, kind of it’s neither here nor there because our returns are not predicated really on the cost of financing. They’re predicated on buying a good business, doing something to make it grow more quickly, and having an attractive exit when we come to sell it, which means it has to be a good business. It has to be growing. And the cost of financing and the quantum isn’t the biggest driver of our returns.

RITHOLTZ: Really interesting. So given the change in size of private equity over the past 25 years, is there a sweet spot? I mean, some of your holdings like Hilton, obviously, giant. I know the Savoy is in the U.K. and in Europe. You guys seem to play across a lot of different sizes. Where is the most fertile ground for growth size-wise?

BARATTA: Well, I think if you look at the evolution of the size of private equity transactions over the last decade, actually, they haven’t grown very much, notwithstanding the fact that the equity capital market cap is like three or four times bigger than it was in 2007. You know, we bought Hilton in June of 2007. And I know the size, it was 32, 33, 34, $35 billion. Like, the last $30 billion deal we did, I mean, we bought Medline in 2021. So I actually think, at the large end of the private equity market, we’re undercapitalized. It’s very hard for us to assemble much more than a $5 billion equity check. And there are thousands of companies in the U.S. —


BARATTA: — that are $10 billion to $15 billion-plus enterprise value company. 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. And there are many more $10 billion companies today than there was 12 or 15 years ago. So I think the large end of the market we think is the most attractive. It’s where we play. It’s where we have competitive differentiation, and it’s where you find better quality businesses.

RITHOLTZ: At what point does size become the enemy? It sounds like you can scale up by partnering with lots of other PE firms. Is there a ceiling, or at what point you look at something and say, hey, that’s just too big to try and take a bite on?

BARATTA: Yeah. I mean, I think the biggest deal that’s been done in the last 10 years is around $30 billion and that, you know, yeah, to get that done, we had to work with two of our competitors, which is fine. But we’d prefer to buy things on our own, just Blackstone with our limited partners.

RITHOLTZ: You want to control and be able to set how you’re going to exit or how the firm is going to be run?

BARATTA: Well, it’s not necessarily a problem to do that with some of our friendly competitors. But, like, really, our preference is to do it just by ourselves. So, you know, the answer is we can’t really get deals much bigger than, you know, $10 billion to $15 billion done on our own. And I think that’s, right now, a little bit — plus, the financing markets are less liquid, and there’s less quantum available. So I think that’s kind of the realm we’re in. And like I said, those companies aren’t too big to make good returns with. I mean, you have a bunch of companies that have trillion dollar-plus market caps.

RITHOLTZ: That’s right. So what is $10 billion dollars —

BARATTA: If Apple decides it wants to buy something for, you know, 10, 20, 30, 40, it doesn’t blink, and there are a lot of companies like that.

RITHOLTZ: Really quite fascinating. So you do some really interesting work at Blackstone, including serving on a lot of portfolio companies boards. First Eagle Investment Management, you mentioned Medline earlier, is probably things people are familiar with. Tell us about those experiences. What is it like being on these boards? And what sort of input do you give to managements there?

BARATTA: Well, what brings me energy and joy in my job is investing capital and working with companies. So the way I do, you know, this job, in addition to managing a bunch of our people and engaging in other stuff at the firm is I want to keep a hand in the investing, and engaging with our company. So, yeah, there’s a few companies where I’m closely involved, and I sit on the board and I help their management teams plot strategy and deal with important strategic issues.

Our model is not to run the companies. We find great management teams. We back them with capital and support, and we let them run the businesses. So we operate from a board level and really focus on key strategic and risk management variables.

RITHOLTZ: Really quite interesting. What sort of new markets are you guys considering? What are you looking at that might not have been on the table a decade ago?

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. And today, the clear direction of travel is toward weaning ourselves or these big economies off of hydrocarbons for power. So that is one sector that we’re investing, and that a decade ago, we wouldn’t.

And also, there are new business models, new media models. You know, we spent a lot of time looking at traditional media businesses that linear TV, satellite broadcast, regional sports networks, all these things, that the direction of travel isn’t really investable, the streaming services, direct to consumer. And so, instead of investing in those, we decided to back Kevin Mayer and Tom Staggs, two ex-Disney guys, really well-regarded business guys in the entertainment industry, to build an independent content creation business, which we’ve done both in children’s content with Moonbug, and in live action entertainment with Hello Sunshine, which was the business that Reese Witherspoon started. So that’s the type of thing that a decade ago, we wouldn’t have invested in.

You know, bigger technology companies, software businesses that have proven they’ve got really durable sticky revenue models. Maybe they’re not run that efficiently. You can take margins up. That’s another in market that we’re investing in today, that maybe a decade ago, we wouldn’t have been.

RITHOLTZ: That’s really interesting. How often does a new business model come along that’s really notably different from what preceded it? Is this just part of the life cycle of business, or do you go through these periodic spasms where everything changes?

BARATTA: Well, I would say in my 25-year history at Blackstone, there were certain industries that were growth industries that we were investing in in the mid ‘90s and late ‘90s and early 2000s, that now are no longer investable. So, as an investor, you have to be nimble. You have to have like an open mind and realize that things are changing. Industry structures are changing. Business models are changing. And now, the rate of change is much more quick with the advent of technology, ubiquitous broadband, which really enabled the internet, changed the way we —


BARATTA: — watch media, changed the way we shop, changed the way we found information. It changed the way we communicated with each other. 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. So a big part of what we do is trying to figure out where we don’t want to invest, and what’s going to be dislocated by ubiquitous broadband back in 2005, ’06, ’07, and now, AI with a rate of sophistication of that technology,

RITHOLTZ: So we see a lot of hype business come along. Clearly, there was a ton of hype in crypto. And then the metaverse, you know, almost came and went already, a lot of hype there. My sense is that AI and chatbots, and the recent, you know, multibillion dollar acquisitions that have been done by firms like Microsoft and Google, this doesn’t seem to be that sort of ephemeral hype story. This seems to really be a potential sea change.

BARATTA: I agree with you, I mean, 100 percent. Like I said, there’s 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. You know, the blockchain, when it came people like, hmm, I’m always like, what’s the use case?

RITHOLTZ: Right. It’s a solution and source of a problem, sort of.

BARATTA: Exactly. And it’s cool and, you know, Bitcoin or whatever, they’re just probably a real store of value. But that’s not really investable for us.

RITHOLTZ: Is AI investable? Because it looks like a couple of big companies push their way in, there were a couple of transactions, or is this going to, you know, be the fertilizer that launches a thousand blooms, or whatever the expression is?

BARATTA: It’s 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, for us, in corporate private equity, no. But what it is, is we have to figure out what businesses are going to be disrupted and avoid those, and figure out what mature businesses will be enabled by this and invest in it.

Like, look at Disney, you know, Disney, in large part, was hugely enabled by streaming services because of the amazing content it owned. So it was a beneficiary of the technology change. But cable television models or satellite TV, like, those suffered. And so, we’re trying to find the businesses that are going to be enabled and benefited by AI, and avoid the things that are going to be dislocated.

RITHOLTZ: That’s quite interesting. So I read a quote of yours that cracked me up, I have to ask you about, you said if you weren’t working in private equity, the next best job would be general manager of the Dallas Cowboys.

BARATTA: I mean, with all respect to the Joneses who run that team, you know —

RITHOLTZ: And have done a pretty nice job, right?

BARATTA: — particularly this offseason, they’ve done a nice job. I’ve been a Dallas Cowboys fan since I’m 7 years old.


BARATTA: How could a kid from Sacramento be a Dallas Cowboys fan?


BARATTA: And the answer is —

RITHOLTZ: America’s team.

BARATTA: I was watching the 10:00 a.m. game. Talk about linear TV —


BARATTA: — there were two games, one at 10:00, one at 1:00, and the Cowboys playing in the NFC East. We’re always on the 10:00 a.m. game and it was America’s team. So I’m watching the Cowboys like every Sunday. And then when the Niners got good, I became a contrarian and said, no, I’m going to root for the Cowboys —


BARATTA: — even though they lost in that ’81 thing.

RITHOLTZ: So Joe Montana, Jerry Rice didn’t suck you in.

BARATTA: Not a bit, not a bit. Roger Staubach, Tony Dorsett, Tony

RITHOLTZ: Oh, really? That’s just because —

BARATTA: Roger Staubach, Tony Dorsett, Tony Hill, those guys.

RITHOLTZ: You just stayed on.

BARATTA: And then, of course — and now, look, they’re fun to watch. I love football. I don’t miss a game. And, yes, if Jerry needs some help, you know, he knows who to call.

RITHOLTZ: He’ll reach out to Steve, Steve will put you in touch.

BARATTA: Yeah. Yeah, exactly.

RITHOLTZ: And then we talked about the companies that you’re on the boards of, but you’re also a trustee of the Tate Foundation, which I assume is related to the giant Tate Museum in London. Tell us a little bit about the work you do with them. That sounds like a fascinating organization.

BARATTA: Yeah. The Tate is such a significant cultural institution in the U.K. It’s funded largely by the state. The Tate Foundation is the private philanthropic arm of the Tate that helps fund special projects, whether it’s exhibitions or building new buildings, you know, the big Tate Modern gallery was, in large part, funded by private donations.

RITHOLTZ: Ah, I didn’t know that.

BARATTA: And, you know, philanthropy in the U.K. is at a different scale than in the U.S. So not a lot of money, you know, get engaged in the arts and really important cultural institution; where in the U.K., it’s 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.

RITHOLTZ: I didn’t realize philanthropy was that different overseas than it is here.


RITHOLTZ: First of all, how did you first get involved with them? By the way, my wife loves the Tate Modern, one of her favorite museums.

BARATTA: It’s a great building that had a beautiful collection. Yeah.

RITHOLTZ: How did you first get involved with them?

BARATTA: You know, I had young kids. From 2004 until 2010, we were having babies, and one of the places we would always go is either Tate Britain or Tate Modern. You could consume Saturdays with kids running around. And then, like I said, they’re very accessible. There’s nothing intimidating about those institutions, and then I knew some people who are involved. And I met the director one day and, you know, they asked me to get involved. And so for the last maybe, I don’t know, 12 or so years, I’ve been involved with the Tate Foundation. It’s a great group of people, great organization. So, yeah, that’s been a fun thing to be in.

RITHOLTZ: It sounds like a lot of fun.


RITHOLTZ: So before we let you go, we’re going to jump to our favorite questions that we ask all of our guests, starting with you mentioned streaming, tell us what you’ve been watching, what keeps the family entertained?

BARATTA: I just got done with “Daisy Jones & The Six’ —

RITHOLTZ: I’m halfway through it, really loving it.

BARATTA: — where the music is amazing. The whole aesthetic of it is amazing. The acting is amazing. The music is great. And it also happens to be a production of one of our portfolio companies, Hello Sunshine.

RITHOLTZ: Oh, really? That’s interesting.

BARATTA: And it is this perfect example of what we thought Hello Sunshine could do, the convening power to assemble that amazing ensemble cast, amazing music creators, and create something that is really important to, in this case, Amazon Prime, to be an important counterparty of the streamer. So I’m really proud of what they did there, and it’s a great show.

RITHOLTZ: Yeah, supposed to be sort of loosely fashion day —


RITHOLTZ: — after the Fleetwood Mac story, with all the cross-relationships.

BARATTA: And I think they nailed it. I do really think they nailed it. The other one I love is “White Lotus,” which is fantastic, not a Black Swan-related thing, also awesome.

RITHOLTZ: So I really liked the first season. I haven’t gotten into the second season yet, and people said —

BARATTA: Even better.

RITHOLTZ: It’s wilder and crazy —

BARATTA: Yeah, even better.

RITHOLTZ: — than the first one. So let’s talk about your mentors who helped shape your career.

BARATTA: I’ve been really fortunate in my life where I’ve had, you know, along the way, in the journey, Morgan Stanley, at McCown De Leeuw, at Tinicum which is the Ruttenberg family, where in each of those places, I’ve had somebody who really helped me in my career and with whom I’m very close even today. And then at Blackstone, you know, Steve Schwarzman changed my life; and Tony James, who when I was about four years into Blackstone, really helped transform the firm and make it what it is today. Those two men really were extremely important in my professional development, my personal development, great, amazing mentors.

RITHOLTZ: Let’s talk about books. What are some of your favorites? What are you reading right now?

BARATTA: You know, the book I most recently finished, by Arthur Brooks, a book on happiness.

RITHOLTZ: Yeah. I’ve been following that series —


RITHOLTZ: — in The Atlantic. It’s really quite fascinating.

BARATTA: Yeah, he’s amazing. And in fact, I invited him to come talk to our partner group. We had a global partner off-site in private equity. 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. It’s not just like the next deal, the next promotion, the name in the paper or whatever. You got to get it elsewhere. I think it’s really important for people who are workaholics, who are high achievers to put, you know, everything that we’re doing every day into context and define happiness kind of outside that box. So that’s been a really important book I’ve read recently, and I think he’s great.

RITHOLTZ: Really interesting. We’re down to our last two questions, what sort of advice would you give to a recent college grad who was interested in a career in private equity?

BARATTA: Patience. I think the one thing I’ve seen in this generation of people, like me and you, is we all were impatient. We all wanted to get there fast, but I think it’s entered a new level. Because people start so early, you have to do so much to get in college. We’re hiring summer interns now who are 19 and 20 years old. You know, that did not happen when we were kids. And by the time they’re 30, they wanted to have, like, declared victory on their career. That doesn’t happen.

And enjoy the journey. It takes a long time to figure out like how you get good at something and the particular way you want to do it. And you have to enjoy that process and enjoy like the time it takes. And then by the time you’re in your 40s, you can actually be good at this job. And by the time you’re in your 50s, with some wisdom, you can be really good at the job. But it doesn’t just happen like that. And I think people just need to relax, take a deep breath. In the early days, do what’s asked of them, do it as well as they can, and move on to the next step.

RITHOLTZ: Really interesting answer. Our final question, what do you know about the world of investing today you wish you knew back in the ‘90s when you were first getting started?

BARATTA: I think that it changes so much fundamentally, that you can’t hold on to like, you know, absolutes. There’s really no absolutes. There’s some like risk management things that you always need to be mindful of. But I could have evolved more quickly as an investor, you know, over time, and I continue to learn that lesson.

RITHOLTZ: Really intriguing. Thank you, Joe, for being so generous with your time. We have been speaking with Joe Baratta. He is the Global Head of Private Equity at Blackstone.

If you enjoy this conversation, well, be sure and check out any of the previous 500 or so we’ve done over the past eight years. You can find those at YouTube, iTunes, Spotify, wherever you find your favorite podcasts. Feel free to sign up for my daily reading list at Follow me on Twitter @ritholtz. Follow all of the fine family of Bloomberg podcasts on Twitter @podcast.

I would be remiss if I did not thank the fine team who help put this conversation together each week. Sebastian Escobar is my audio engineer. Paris Wald is my producer. Atika Valbrun is our project manager. Sean Russo is my researcher.

I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.





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