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Blackstone's Schwarzman's earnings flat in 2012; Apollo's Black gains

Stephen Schwarzman, chairman and CEO of the Blackstone Group, attends the annual meeting of the World Economic Forum in Davos January 24, 20
Stephen Schwarzman, chairman and CEO of the Blackstone Group, attends the annual meeting of the World Economic Forum in Davos January 24, 20

By Greg Roumeliotis

(Reuters) - The earnings of Blackstone Group LP head Stephen Schwarzman were flat in 2012 at more than $200 million, while Leon Black, the CEO at private equity rival Apollo Global Management LLC , closed in on him with a 73 percent rise in his earnings.

Black's 2012 earnings rose to $180.2 million, while Schwarzman's earnings were $213.3 million, according to separate regulatory filings by the two firms on Friday.

The two buyout kings saw a big rise in dividends from their stakes in the firms they founded. Schwarzman, however, received just $800,000 in 2012 from funds predating Blackstone's initial public offering in 2007, compared with the $74 million he received from these funds in 2011.

Private equity firms took advantage of buoyant equity and debt markets in 2012 to sell many of their investments, leading to bumper profits for their fund managers who receive performance fees in the form of so-called carried interest.

Schwarzman and Black, who are both billionaires, receive other income through their own investments in their funds, which is not disclosed. Schwarzman had a net worth of $5.2 billion as of September 2012, while Black had a net worth of $3.5 billion, according to Forbes.

KKR & Co LP's co-founders and chief executives, Henry Kravis and George Roberts, received about $137 million and $141 million, respectively, in executive compensation and cash dividends in 2012, up by more than 45 percent over what they received in 2011.

Most of Schwarzman's and Black's profits came from their ownership stakes in their firms. Schwarzman, who has a 21 percent stake in Blackstone, received $204.1 million, up from $134.5 million in 2011. Black, who holds a 24 percent in Apollo, received $179.9 million, up from $103.9 million.

Schwarzman, 66, received $8.4 million in compensation, which includes a $350,000 salary. Black, 61, received just $287,368, of which just $100,000 is salary. The rest includes carried interest the two men are entitled to as chief fund managers.

Blackstone had $210.2 billion of assets under management as of the end of last year, making it the world's largest alternative asset manager, while Apollo had $113.4 billion. KKR & Co LP had $75.5 billion, and Carlyle Group LP had $170 billion.

CO-FOUNDERS

Schwarzman co-founded Blackstone in 1985 with Peter Peterson and in 2002 brought in veteran investment banker Tony James as his right-hand man. Black founded Apollo in 1990 together with Joshua Harris and Marc Rowan.

James, 62, is Blackstone's president and chief operating officer. He got about $66 million from salary, bonus and holdings in the private equity firm in 2012. That compares with $52.6 million in 2011 and follows his $64.2 million sale of a small portion of his shares last month.

Black's partners Harris, 48, and Rowan, 50, who each own 15 percent of Apollo, took $114.5 million apiece for 2012 in dividends. They got $66.1 million each for 2011.

Apollo also said senior employees had committed about $1 billion of their own money into the private equity firm's funds from its inception through the end of last year.

The amount of distributions, including profits and return of capital, in 2011 from these investments was $88.5 million for Black, $26.2 million for Rowan and $33 million for Harris. However, Apollo does not disclose how much the actual profits from these investments were.

Black, Rowan and Harris, respectively, invested $15.6 million, $18.2 million and $4.2 million in Apollo's funds in 2011. But in 2012 they invested, respectively, only $46,868, $1.7 million and $97,631, Apollo said.

Blackstone does not disclose Schwarzman's and James's income from investments in Blackstone's funds.

Carlyle's founders, William Conway, Daniel D'Aniello and David Rubenstein, in 20122 received $134 million each in cash distributions and $3.8 million in executive compensation. Their 2012 earnings will be disclosed in a regulatory filing later this month.

(Reporting by Greg Roumeliotis; Editing by Leslie Adler)

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