Peter Peterson, who died at the end of March at 91, leaves a rich legacy.
Beginning his career in corporate America, he later went into government, serving as secretary of commerce under President Nixon and chairman of the Federal Reserve Bank from 2000 to 2004, among other posts.
His long career in finance needs little introduction, with the founding of Blackstone alongside chief executive Stephen Schwarzman in 1985 after a decade as chairman of Lehman Brothers.
Early on in the private equity world, he identified the power of relationships and applied it to Blackstone.
“As the world has become more predatory and aggressive, my impression is that the investment banking business has moved from being relationship-oriented to being increasingly transaction-oriented,” Peterson told The New York Times in October 1985, when the newspaper wrote about Schwarzman having left Lehman to join the new firm. “At the moment, there aren’t too many investment bankers around who have this sort of relationship focus.”
Despite making a fortune thanks to private equity, he remained realistic and honest about the industry.
Asked by the Financial Times in 2007 why Blackstone did so well, he said: “Dumb luck can play a huge role in life. It is all too easy in the 1990s for people to say I must be a genius investor because I got returns of 30 percent or whatever. If you combine a lot of leverage with a booming stock market, it isn’t all that difficult to make a lot of money, so I don’t think we should get carried away with ourselves, frankly.”
He eventually retired in 2008 about a year after Blackstone went public, turning his initial $200,000 investment into about $1.8 billion before taxes and other expenses.
After the IPO, he even expressed support for carried interest to be taxed as income.
“If you’re a hedge fund and a private equity fund and you get carried interest taxed as capital gains, I can’t justify that, because it’s payment for services, and it ought to be taxed as income tax,” he told The New York Times Magazine, adding that he and Schwarzman “both put up $200,000, and it was a wonderful return”.
Words of remembrance circled on social media after the announcement: “I was deeply saddened to learn of the passing of my friend Pete Peterson,” Schwarzman wrote via Blackstone’s Twitter account.
“One could never ask for a better partner than Pete. He was endlessly creative and unafraid of doing things. He was a source of limitless wisdom and good judgment, and a true entrepreneur at heart. Pete led an incredible life, leaving a lasting mark on both Blackstone and the broader world. On behalf of the firm and its more than 2,000 employees, we extend our deepest condolences to the Peterson family.”
But what he may be remembered the most for might be his quest later in life to increase awareness of the US’s long-term fiscal challenges, denounce the federal deficit and revamp social security, mostly through his foundation, which he started in 2008.
On social media, Michael Bloomberg called him one of the great patriots and philanthropists of our time, while Bill Clinton referred to him as a brilliant businessman, principled public servant, committed philanthropist, great friend and profoundly good man.