KEY POINTS:
You know the one about Emperor Nero fiddling while Rome burned? If not, perhaps you should ask Stephen Schwarzman, founder of Blackstone, the multi-billion-dollar private equity group.
Blackstone has had a fairly bad time of late, in keeping with the rest of the financial world. On Monday of
last week the firm reported a quarterly loss of US$113.2 million ($149 million), missing analysts' estimates by a mile and sending its shares down more than 6 per cent.
Blackstone's results revealed how the subprime mortgage meltdown has hit the private equity industry and how investors and analysts still struggle to understand the firm's sprawling business.
Blackstone is now a listed public company with shares that trade on the stockmarket, unlike most private equity companies. So, when things go bad for Blackstone it is investors who feel it, not just Schwarzman and his partners.
So, you might ask, what was Schwarzman doing over the weekend prior to this announcement - the worst his company has had to make since it joined the stockmarket?
Was he ringing his hands at the thought of all those shareholders who would lose money? Better yet, was he thinking up a new idea to reverse the credit crunch and bring the returns he promised to all those investors whom he convinced to buy shares in his US$4 billion private equity shop in June?
Sadly not.
On Saturday, November 10, Stephen Schwarzman and his friends, family and business associates were gathered at the Round Hill resort in Jamaica's Montego Bay to celebrate the marriage of Teddy Schwarzman, his son, to Ellen Zajac.
Now, the Schwarzmans have a reputation when it comes to throwing a party. In February Schwarzman rented out the Park Avenue Armoury for an undeniably fabulous US$3 million birthday bash. Around 500 guests toasted his 60th, hailing him for reeling in the world's biggest buyout just four days earlier: the US$39 billion deal involving commercial-building empire Equity Office Group. They enjoyed a US$1 million concert by Rod Stewart, free-flowing wine and gourmet feasting.
So it comes as no surprise that Teddy's wedding was on the opulent side, too. The family rented the entire Round Hill site for a fee of US$50,000, paying thousands more to block-book rooms for 130 guests.
They gathered on a private beach on Friday night for a US$20,000 barbecue supper. This pre-wedding gathering cost in excess of US$30,000.
The wedding banquet was more opulent, with a bar tab for pre-dinner drinks close to US$7000, with thousands extra for champagne and fine wines.
But the biggest extravagance was US$12,500 for a fireworks display, jazz band and a top DJ.
Perhaps the wedding will help Blackstone find a solution to the subprime mortgage crisis after all.
The new Mrs Schwarzman is a top lawyer with Thacher, Proffitt & Wood, a leading New York firm. Her specialisation? Mortgage-backed securities.
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