RITHOLTZ: Really interesting. I have to point out that your life history is a series of ever-worsening weather. RITHOLTZ: Really quite fascinating. BARATTA: In November of 2001, when I moved over , BARATTA: The industry wasnt called private equity; it was called venture capital and it wasnt . And, you know, Ive lived in great places. Where is the most fertile ground for growth size-wise? And its cool and, you know, Bitcoin or whatever, theyre just probably a real store of value. It wasnt very long after the handover of Hong Kong to China, like a lot of things were changing in both the U.K. and Europe. So given the change in size of private equity over the past 25 years, is there a sweet spot? I thought the conversation was quite fascinating, and I think you will as well. You had a longer period of time to figure out if you were right or not. How are you looking at the investment environment today? You have your way. The spokesperson for the company, previously valued at $1.2 billion when SoftBank invested in it in 2021,declined to offer details on the misconduct Sequoia Capital Hired National Security Advisory Firm as China Deals Draw U.S. Mr. Baratta owns over 85,000 units of Blackstone Inc stock worth over $99,814,339 and over the last 3 years he sold BX stock worth over $81,255,679. So you move to the U.K. RITHOLTZ: Youre an hour to hop from all the key places . And so, corporate carve-outs, public to private, you know, the last few deals weve done, a bit of large corporate carve-out from a large important American corporate, Emerson. RITHOLTZ: You could just access everything online as well , BARATTA: Fewer of them. "For any professional investor, this is the most difficult period we've ever experienced . And in fact, I invited him to come talk to our partner group. BARATTA: How could a kid from Sacramento be a Dallas Cowboys fan? RITHOLTZ: Really intriguing. But it doesnt just happen like that. [1] Early life Born in Sacramento, California, Baratta graduated from Jesuit High School in the Sacramento area in 1989, then Georgetown University, from which he graduated magna cum laude in 1993. And so, in terms of where our teams are spending time, its in and around sort of public markets. BARATTA: I think private market valuations are driven to a large degree by whats going on in the public markets. When I came to the city, I was like, wow, this place is amazing. What are the challenges of investing in a place like India? RITHOLTZ: in The Atlantic. 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? 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. BARATTA: Even more mature companies. Were always on the 10:00 a.m. game and it was Americas team. BARATTA: even though they lost in that 81 thing. And, you know, cost structures are a little less efficient there may be than in the U.S. now. So that is one sector that were investing, and that a decade ago, we wouldnt. 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. So lets talk a little bit about the state of PE investing today. Its not just like the next deal, the next promotion, the name in the paper or whatever. Hours Left50% Off The Information Pro Ends TonightGet Pro. It has to be growing. RITHOLTZ: Well, the past decade, the intangibles have been super attractive. And what sort of input do you give to managements there? RITHOLTZ: Well, so far, youre pretty interesting. 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. You could only wear black shoes. BARATTA: I mean, as much as we could. Abraham Shafi has stepped down as CEO of messaging app IRL following allegations that the company used bots to inflate the users it reported publicly and to investors, according to a person with direct knowledge. So taking advantage of the currency declining, a lower cost base in India, but revenues denominated in dollars or euros. And so we did, but we were kind of trying to do deals by airplane from New York, and thats not functional. Hes probably 42 or 43. BARATTA: If Apple decides it wants to buy something for, you know, 10, 20, 30, 40, it doesnt blink, and there are a lot of companies like that. It was a small industry. joe baratta blackstone compensation. 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 whove gone to Dalton High School here, so completely different world. 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. And really, most of our expansion started with our real estate business, because its a little bit easier to expand globally in real estate because its more asset-based rather than like . And I think thats, right now, a little bit plus, the financing markets are less liquid, and theres less quantum available. A former employee of SoftBank-backed messaging app IRL alleged in a legal filing that the company has inflated its user count and retaliated against him and other employees who raised concerns about the accuracy of its user numbers. RITHOLTZ: So we see a lot of hype business come along. BARATTA: I had agreed to go before September 11th happened. Where are you looking around the world? Why am I talking to him? But thats not really investable for us. You know, that did not happen when we were kids. And we were kind of oddities at that time, particularly in private equity which was still really in its infancy. I think that also theres 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. BARATTA: Yeah. 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 And we were like, look, wed be great partners as youre looking at assets. 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. That had to be a giant challenge, especially given what was taking place. RITHOLTZ: Similar to U.S. antitrust rules . Maybe theyre not run that efficiently. And we did we became more cautious. Were seeing in our businesses real stability across most sectors. Of course, I mean, France, Germany, Italy, Spain, you know, the whole Nordic region, Sweden, theyre not . 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. And by the time youre in your 50s, with some wisdom, you can be really good at the job. As of 1 April 2023 he still owns at least 1,145,448 units of Blackstone Inc stock. Ive been super lucky to have these fun adventures, whether or not with Stanley. Sounds like you guys arent aggressively in the, were in a recession or about to have a recession six months. Mr. Baratta served as the Senior Managing Director and Head of European Private Equity at The Blackstone Group. RITHOLTZ: across all these different inputs. It had a lot of momentum. Theres nothing intimidating about those institutions, and then I knew some people who are involved. Im assuming that all these different names all come from different work products, different strategies, different funds, or is just everybody getting this wrong? The IOC and FIFA are scrambling to change their ways before it's too late. So I think thats kind of the realm were in. Even though the buyout king has no plans to retire, the appointment of Joe Baratta, a 41-year-old dealmaker credited with building up the firm's European buyouts practice, was the latest step. 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? Tell us about those experiences. Privacy Policy Global Head of Private Equity, Joe Baratta, shared insights on how Blackstone is thinking long-term in this business cycle and how investors can prepare - by focusing intently on sector &. How Greed and Easy Money Corrupted Wall Street and Shook the World Economy You want to be able to ensure that youre bringing in best-in-class management thats really perfectly aligned with you. To view recent press releases,click here. At first, Blackstone executives discussed the idea of Mayer consulting with the firm or managing one of its existing portfolio companies. BARATTA: Well, yeah, the private credit market I think is really attractive, and its actually been around a long time. Mr. I mean, inflation is higher than normal, but thats going to come down. To view recent press releases, click here. Blackstone Group Inc Chief Executive Stephen Schwarzman pocketed at least $610.5 million in 2020 from dividends and compensation, more than any other private equity executive and up 20% from last . Scrutiny, Apple Drops Lawsuit Against Former Chip Executive Over IP Theft, Coinbase CEOs Pay Shrinks as Stock Slides. In the early days, do whats asked of them, do it as well as they can, and move on to the next step. 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 . Please click here if you would like more information about the cookies used on this website and how to change your cookie settings. RITHOLTZ: I was waiting for you to say, and it was 10:00 a.m. and they broke open the bottles of Bordeaux. You get paid for the incremental risk that youre taking in a more leveraged capital structure. Ive been following that series . I havent gotten into the second season yet, and people said . BARATTA: So Steve said, we got to have real presence. BARATTA: where the music is amazing. Venture capital was the nomenclature for everything that was basically a private investment. In addition, he makes $0 as Global Head of Private Equity and Director of the Company at Blackstone Inc. And there, we were two young Americans, no language skills, like what are we supposed to do? RITHOLTZ: So really a period of transition and . RITHOLTZ: culturally or language-wise, when youre up you know, when youre bouncing from you know, you go to Frankfurt to Denmark, two totally different worlds. BARATTA: Well, one thing that John and Steve have done is to make sure the firm is really joined up across our investment businesses. 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. Its attracted a lot of capital. 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 Im really proud of what they did there, and its a great show. 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. I mean, I think the biggest deal thats 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. By the way, my wife loves the Tate Modern, one of her favorite museums. Like, look at Disney, you know, Disney, in large part, was hugely enabled by streaming services because of the amazing content it owned. 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. He also shares how Blackstone's approach backing companies in sectors with secular. BARATTA: Well, you have to get him back. We recently announced to take private of a technology company called Cvent, which is publicly traded. His current reading is here; A transcript of our conversation is available here Tuesday. RITHOLTZ: But youre not dealing with startups; youre dealing with . Switchboard: +1 (212) 583-5000. Now, the firm had assets. So it was a beneficiary of the technology change. Were seeing maybe wage increases beginning to decline. But, you know, when I moved, you didnt have the single currency in circulation until January of 02. Its a great group of people, great organization. RITHOLTZ: Post Brexit, is that the driver? 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. And I thought private equity was interesting because you could live with those investments for a longer period of time. That was our first deal in Europe, which was actually a U.S. deal, but we probably wouldnt have done it had we not been there . I dont miss a game. We cant do that. Joseph Baratta is Global Head of Private Equity and a member of the firm's Management Committee. BARATTA: I think early on, it was important until we established ourselves, and then we did less of that. And I think, largely, you want to avoid highly regulated industries, where youre relying on the government to do something. RITHOLTZ: Lets talk a little bit about your career at Blackstone. Is that the sort of infrastructure were talking about in addition to all the obvious ones weve been mentioning? BARATTA: Yeah. So its a whole broad spectrum of investing in the energy complex focused on the transition from hydrocarbons to renewable sources. Learn More Get subscriber-only insights and news delivered by Barry every two weeks. It is an institutionalized asset class. We actually have assets where those are going in, or were investing in components that are part of . Overnight on Wall Street is morning in Europe. The estimated Net Worth of Joseph Baratta is at least $181 Million dollars as of 1 April 2023. So, yes, private equity valuations are influenced very significantly by whats going on in the public markets. RITHOLTZ: I dont want to suggest that thats what we hear. You can stream and download our full conversation, including any podcast extras, iTunes, Spotify, Stitcher, Google, Bloomberg, and Omny. BARATTA: Yeah. And so, in private equity . 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.. I think were 4,500 , BARATTA: or something like that. * * * * * You mentioned private credit. The whole aesthetic of it is amazing. The most active insiders traders include James Breyer, Hamilton E James, and International Group Incaig . BARATTA: I go to California all the time. RITHOLTZ: You dont have the same labor costs. 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. BARATTA: Well, I think if you look at the evolution of the size of private equity transactions over the last decade, actually, they havent grown very much, notwithstanding the fact that the equity capital market cap is like three or four times bigger than it was in 2007. I think Id been to London Im not even sure Id been to London. On average, Joseph trades about 53,227 units every 51 days since 2020. We combined it with another one. RITHOLTZ: Right. We back them with capital and support, and we let them run the businesses. Its very hard for us to assemble much more than a $5 billion equity check. You mentioned real estate, private equity, M&A. MarketCounsel and Hamburger Law Firm are the leading business & regulatory compliance consultancy to the countrys preeminent entrepreneurial independent investment advisers in the investment and securities industry. 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. Clearly, there was a ton of hype in crypto. RITHOLTZ: You know, when there is no alternative, people just pile into equity. RITHOLTZ: But youre still dealing with a lot of European at that time. The estimated Net Worth of Joseph Baratta is at least $181 Million dollars as of 1 April 2023. And so for the last maybe, I dont know, 12 or so years, Ive been involved with the Tate Foundation. And then when the Niners got good, I became a contrarian and said, no, Im going to root for the Cowboys . So I think the large end of the market we think is the most attractive. Previously, Mr. Baratta served as the Senior Managing Director at the Blackstone Group, Private Equity Group. BARATTA: You know, the book I most recently finished, by Arthur Brooks, a book on happiness. 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. So, really, in private equity, our first adventure outside of Western Europe was in India and China, and that was somewhere around 2005. Paris Wald is my producer. We hired an Italian for the firm, Andrea Valeri. BARATTA: Ive been really fortunate in my life where Ive 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, Ive had somebody who really helped me in my career and with whom Im very close even today. 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. Mr.Barattahas served on the boards of many past Blackstone portfolio companies and currently serves as a member or observer on the boards of. We all wanted to get there fast, but I think its entered a new level. He is also a member of the firms Management Committee and serves on many of the firms investment committees. Thats a pretty good run. April 15, 2023 10:00am by BARATTA: You know, I had young kids. And so, we began to hire local people who were young in their careers. RITHOLTZ: And when you say Steve, for those people who may not be familiar with . Its a solution and source of a problem, sort of. RITHOLTZ: How did you first get involved with them? Joseph Baratta on the Future of Private Equity Masters in Business Investing Bloomberg Radio host Barry Ritholtz speaks with Joseph Baratta, who has served as global head of private equity at Blackstone - the world's largest alternative asset manager, with $975 billion in assets under management - since 2012. You know, I sort of looked at, well, the industry in Europe is a good decade or two behind the U.S. Yeah. You know, in the market, its like if you start at the wrong time, if youre wrong for a few quarters, like, boom, like the career is abbreviated. BARATTA: I think private credit has filled the hole for these smaller businesses, but really not on the full banking suite. You had Lehman almost go bust, I think, around that time for maybe the first or second time. That is part of the energy transition. It feels like were 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. BARATTA: I mean, with all respect to the Joneses who run that team, you know . 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. 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. The Fed was saying, no, its transitory or whatever adjective they used. Individual Investors & Financial Advisors. There were a few firms, couple of big leaders like KKR. And also, there are new business models, new media models. 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? 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 well continue to buy businesses. Two years ago, Joe Baratta couldnt figure out what Blackstone, the private equity giant he worked for, should do for its next move in media and entertainment. Joseph P. Baratta serves as Global Head of Private Equity and Director of the Company of the Company. Commitments from new limited partners, along with significant re-ups from Fund I LPs, attest to "more interest in the concept" today relative to four years ago, Baratta said. BARATTA: that are $10 billion to $15 billion-plus enterprise value company. Yeah. Its one firm made unified. You can take margins up. Am I exaggerating that at all or . And weve become better at what we do in buying control of companies, engaging with them, making them better, helping them grow. And so, yeah, and weve had limited partners in our funds whove been with us since the early 90s now and keep re-upping because we deliver a good return for their beneficiaries. Thursday July 19, 2012 11:50 pm. Get subscriber-only insights and news delivered by Barry daily. You know, to your point, like its hard to turn on a dime and say, sell the whole portfolio. Mr. Baratta has been with Blackstone for 22 years, including ov I do really think they nailed it. So when youre adjusting your investment posture, youre basically saying were going to take more risk or less risk . Your base of operations when youre in the U.K. is London, but youre back and forth to multiple countries. Im Barry Ritholtz. We have been speaking with Joe Baratta. I would be remiss if I did not thank the fine team who help put this conversation together each week. RITHOLTZ: I never would have guessed that. I found this to be a fascinating conversation because Joes career has very much paralleled the growth of private equity. Theres really no absolutes. So, overall, the picture we see is of a reasonable economy, with some risks to the future, but I dont whatever recession we may have, I dont think is going to be really significant. Inflation is significant. Joe Baratta, welcome to Bloomberg. Thank you, Joe, for being so generous with your time. 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: than the first one. RITHOLTZ: Youre looking at the cost of capital and how much margin or leverage you want to assume. RITHOLTZ: So eventually you leave Morgan Stanley, you ended up at Tinicum Incorporated and McCown De Leeuw & Company. On average, Blackstone Inc executives and independent directors trade stock every 59 days with the average trade being worth of $43,777,685. He is also a member of the firm's Management Committee and serves on many of the firm's investment committees. So thats been a really important book Ive read recently, and I think hes great. India is very attractive. Disclosures BARATTA: I think people are very negative on the U.K. and . Kirk Falconer - January 10 2022 + BARATTA: What weve found is that control is important in India. He is the Global Head of Private Equity at Blackstone. Its not just power generation from those sources, but its 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. BARATTA: Yeah. All of our earlier podcasts on your favorite pod hosts can be found here. You know, energy prices are higher. Terms and Conditions. You werent taken seriously. Both in terms of the aggregate revenue of our company, size of our portfolio, were 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 were invested. All Rights Reserved. RITHOLTZ: Yeah, supposed to be sort of loosely fashion day . RITHOLTZ: Thats really interesting. 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. But Mayer and a former Disney colleague, Tom Staggs, had a different pitch: Would Blackstone back a brand-new media company they were forming that would tap into the gusher of money going into streaming? Yeah. Off-duty: Blackstone's Joe Baratta on gravel biking, Cloud Cuckoo Land and the Dallas Cowboys Baratta's shares his New Year's resolution, books he's reading and high and low career moments, as well as his fantasy management role in the NFL. So youre raising the bar. 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. RITHOLTZ: Really interesting. All the places youve mentioned, like Germany is very different than the Switzerland . Blackstone is one of the worlds leading investment firms. 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. BARATTA: Exactly. Energy has been a major investment theme across many of our businesses in credit and corporate private equity. Theyre 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. So we did a lot of these sorts of consolidation place. But in the moment, it was less wonderful. What are you reading right now? The firm had had , RITHOLTZ: Do you need language skills in England, or is it . RITHOLTZ: So its not like the public markets where you could say sell here, buy there, because you have such obvious prints . And the market hasnt loved owning manufacturing industrial-type businesses. Joseph Baratta is the Global Head of Private Equity and a member of Blackstone's Board of Directors. So what is $10 billion dollars . My friend and former Morgan Stanley analyst, colleague, Chad Pike, ran our European real estate stuff. I liked it, I thought I could build a successful career. Hes way more interesting than me. BARATTA: I got a lot of good friends from high school. The goal: to help bring brand . What sort of new markets are you guys considering? And I was like, geez, okay, well . Fintechs, beat down by the tech meltdown last year, are struggling to make good on their pitch to consumers. The first job for Morgan Stanley was McCown De Leeuw. What is it like being on these boards? Were 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? The estimated net worth of Joseph Baratta is at least $105.31 million as of April 3rd, 2023. But if we can find a great business at a reasonable price in Europe, were going to buy it. And, you know, I needed to earn some money and I was adept in finance. Scottish & Newcastle was a big brewer up in Scotland at that time. And so, were 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. Before joining Blackstone, Mr. Baratta was with Tinicum Incorporated and McCown De Leeuw & Company. The largest trade he's ever made was selling 434,815 units of Blackstone Inc stock on 4 August 2020 worth over $23,045,195. RITHOLTZ: And businesses just have to exist. 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 dont you come and do this with me? BARATTA: Yeah. You guys seem to play across a lot of different sizes. In terms of sectors, the real value dislocations have happened in the technology industry. And when I .
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