Retiring Blackstone vice-chair sells $500m worth of stock

Hamilton James has sold $500m worth of Blackstone stock just weeks before leaving the firm he helped transform from a small private equity partnership to a global alternative asset management giant.

The outgoing vice-chair of Blackstone Group, who has announced he will step down in January, said he sold part of his shares because his children’s trusts were diversifying their holdings, according to a regulatory filing.

He will retain 80 per cent of his Blackstone shares, which make up the bulk of his $3.2bn net worth, according to Forbes.

James sold his shares on Tuesday, the same day that Blackstone said it had doubled its share repurchase authorisation to $2bn, which allowed it to buy shares at the same price James sold.

Blackstone said James’s sale was “only enough shares to partially fund the taxes owed on the exchange” made by his children’s trusts and that he “has expressed his intention to remain a long-term Blackstone shareholder given his strong confidence in the firm’s future”. 

Since the start of the year, Blackstone’s share price has more than doubled to $134.60, reflecting its surging growth in assets and profits amid a record year of activity and fundraising for the buyout industry.

Last week, James announced his upcoming departure from Blackstone after an almost two-decade career, during which he played a central role in growing once a small, mainly buyout-focused firm into one of the world’s largest investors with $731bn in assets under management and a public market capitalisation of $164bn.

From 2002 to 2018, James was the firm’s chief operating officer, helping to oversee its daily operations and acting as a critical figure in its 2007 initial public offering. He was one of the main drivers of Blackstone’s move into the credit business with the firm’s 2008 almost $1bn acquisition of GSO, which has since been renamed Blackstone Credit.

James also was a crucial player in building Blackstone’s secondaries business — funds set up to buy interests in older private equity funds — which has $45bn in assets, as well as its opportunistic investment strategy, called Blackstone Tactical Opportunities, which invests across various asset classes.

“It has been an amazing 20 years at Blackstone!” James said in a statement sent to the Financial Times. “I have watched the firm grow its assets under management over 30-fold and develop into what I believe is the finest financial institution in the world.”

James stepped away from a daily operating role in 2018 and became executive vice-chair of the firm, as the asset management giant put president and chief operating officer Jonathan Gray in charge of daily operations.

Gray is widely believed to be in line to succeed co-founder Stephen Schwarzman, Blackstone’s chief executive and chair.

“We would not have gotten as far as we have, nor would Blackstone be the firm that it is today without his talent, commitment, and managerial strength,” Schwarzman said of James in the internal memo sent to employees on December 2. “He has shown dedication, loyalty, and true imagination.”