Philip Green, the celebrated UK billionaire entrepreneur, is said not to keep a computer in his office because, he has been quoted as saying, business is best done face to face.
It's a view shared by Stephen Schwarzman, co-founder of Blackstone and, together with Carlyle's David Rubenstein, a protagonist in this month's cover story. What may seem a trivial personal principle has in fact had a profound impact on how Blackstone has evolved over the past 15 years. Because Schwarzman insists that the firm's senior executives should always be able to look their employees in the eye when taking decisions, Blackstone has been reluctant to open new offices beyond its bases in New York and London. Schwarzman is serious when he says the recent decision to add a presence in Hamburg is in part because video conferencing technology has improved considerably.
Schwarzman's dislike for long-distance management has not stopped Blackstone from turning into one of the most powerful global private equity groups in existence. But it is also telling that rival Carlyle should have achieved the same following a very different strategy: the group has seven offices in the US, and another 12 in Europe and Asia.
This contrast is relevant because private equity groups big and small, buyside and sellside, are presently pondering the best organisational structure for their businesses. Just ask Jens Bisgaard-Frantzen of heavyweight private equity investor ATP, this month's Privately Speaking interviewee: as his organisation grows, he is facing a similar challenge.
Clearly there isn't just one way of building a successful private equity operation. But as the industry matures, getting it as right as possible will be essential in these more competitive days – though having access to a PC in the office may be no bad thing either.
Philip BorelManaging Editor