Schwarzman Says Selling BlackRock Was ‘Heroic’ Mistake

Blackstone Group LP’s Steve Schwarzman said his decision 19 years ago to sell what would become the world’s largest money manager was a “heroic” mistake.

Blackstone, the largest manager of alternative investments such as private equity and real estate, in 1994 sold a mortgage-securities unit with $23 billion in assets to PNC Bank Corp. for $240 million. Schwarzman, Blackstone’s co-founder, had disagreed with the group’s leader, Laurence Fink, over methods of compensation, and the men parted ways. The unit, which traded mortgages and other fixed-income assets, changed its name during the sale process from Blackstone Financial Management to BlackRock Financial Management.