First Round was doing what it does best recently – gossiping with LPs – and came across what it thought was a remarkable piece of intelligence.
As part of its research into the world’s largest firms First Round was asking one prominent investor what they knew of the inner workings of Blackstone, a firm which at this point was soon to be crowned No.1 in this year’s PEI 300.
First Round was keen to examine the firm’s secret sauce. There must be more to becoming the world’s most successful private equity firm than scale, consistent returns and a canny mix of strategy and asset class offerings.
“Well,” said the LP, his voice dropping to entre nous hush. “One former employee told me that their conference call facilities have no ‘mute’ function.”
No ‘mute’ function? First Round mulled this little nugget for some time and it began to make sense. In a global business, you want your teams in different continents to be laser-focused on the matters in hand, not having side-conversations or bad-mouthing whoever happens to be on the other end of the line.
And what a message it sends about transparency: we are a collegiate, open, collaborative organisation. If something is worth saying, then we all should hear it.
It all began to fit with First Round’s image of the firm. Visitors to its website can watch an impressive five-minute film based around the firm’s Monday meeting. Voices throughout the Blackstone command structure discuss the sharing of ideas and collective wisdom of the group. Stirring stuff indeed.
But no ‘mute’ function? What happens if Tony or Steve wants to dial in from home and the dog starts barking?
When First Round took this information to Blackstone’s managing director of public affairs Andrew Dowler, it was disappointed to learn that it was in fact a myth. When pressed on where the legend might have sprung from, Dowler – ever the professional spinner – responded that, while he was not sure where this particular rumour might have started, “there is undoubtedly a culture of transparency and openness”.