Romney Helped Blackstone Make 16x Their Money in First PE Deal

Steve Schwarzman, the Blackstone Group’s chairman and CEO, gave us some idea why he is backing Mitt Romney in his presidential bid.

Schwarzman told Bloomberg Television that Blackstone’s first PE investment in 1985 was a joint deal with Romney, who was head of Bain Capital at the time. The purchase of an aluminum wheel maker, which expanded rapidly, “turned out to be a marvelously successful deal,” Schwarzman said. “We made about 16 times profit,” the Blackstone CEO said.

Blackstone also did a second deal with Romney, Schwarzman told Bloomberg. “We invited [Romney] to be the minority partner and we made 24 times our money,” he said. “In finance, that’s a way to make friends.”

Romney founded Bain Capital in 1984. Under his leadership, Bain Capital invested in companies such as Domino’s Pizza and Staples. He was elected governor of Massachusetts in 2002 but didn’t seek reelection in 2006.

Earlier this week, Bloomberg reported that Schwarzman will be hosting a fundraiser in Romney’s honor next month. Schwarzman is also expected to persuade his Wall Street friends to back Romney in his bid for the president.

Schwarzman, who-cofounded Blackstone, also disclosed why he thinks Romney would make a good president. “In terms of being good for the country, he is very smart,” Schwarzman said. “He’s great in a crisis. He’s direct. He can deal with problems as they actually occur. He is a natural leader and he is accessible. He listens to what you say.”

See the video here.