Blackstone CEO gala is sign of buyout boom

By Michael Flaherty

NEW YORK (Reuters) - Comedian Martin Short, singer Patti LaBelle, two Harlem choirs and a marching band had already warmed up the crowd who gathered to celebrate the birthday of Blackstone Group's chief executive.

But the party really got going when British rocker Rod Stewart took the stage, later crooning "Tonight's The Night (Gonna Be Alright)" to birthday boy Stephen Schwarzman and hundreds of guests, according to those who attended.

For Schwarzman, the co-founder, chairman and CEO of Blackstone, Thursday night was indeed his night. The last few years haven't been so bad either.

The Blackstone Group's success has brought his net worth to around $2.5 billion, according to Forbes magazine. He reportedly earned more than $200 million last year.

The over-the-top 60th birthday party highlighted the golden era being enjoyed by Blackstone and other private equity firms, which buy and sell companies.

For some, the party brought back memories of past high times on Wall Street, like the junk bond frenzy led by Michael Milken in the 1980s and the Internet boom in the late 1990s. For others, it was a sign that a buyout bust could be just around the corner.

"It's the kind of stuff that makes us think that we're at the top," said an executive at another large private equity firm, who did not attend the party.

Blackstone is riding high, recently sealing a deal to buy Equity Office Properties Trust for $39 billion, which is the largest private equity deal ever if assumed debt is included.

The group is also raising $20 billion for what is expected to be the largest buyout fund ever. And last year they did more than $101.7 billion worth of deals, exluding acquired debt, more than any other buyout firm, according to Dealogic.

FROM MOGULS TO CARDINALS

Tuesday's event reportedly cost more than $3 million and the guest list was a "who's who" in the world of finance, society, and politics.

At Schwarzman's table were New York Cardinal Edward Egan, former Secretary of State Colin Powell, and Lazard banker Jeffrey Rosen. At another table were the chief executives of major Wall Street banks, including Citigroup, J.P. Morgan, and Bear Stearns, according to guests who attended the event.

Schwarzman's mother, his two grown children and step-daughter were also there last night.

Among other party goers were real estate mogul Donald Trump; civil rights lawyer and business leader Vernon Jordan; television journalists Barbara Walters and Charlie Rose; New Jersey governor Jon Corzine; and former New York governor George Pataki.

Several guests commented that they could easily look back in a few years and point to it as the high point of a private equity bubble, according to a person who attended.