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US buy-out firm Blackstone announces changes to management structure

US buy-out firm The Blackstone Group has announced several changes in senior management responsibilities, most notably the elevation of Hamilton James, in what appears a gradualist response to succession issues.

Stephen A Schwarzman, a co-founder of the firm, said, 'The extraordinary growth of the past few years, not only in assets under management but also in the range of alternative investments that the firm makes available to its investors, has led Pete (co-founder Peter G Peterson) and me to address long-term management planning issues.'

'There is a need to realign our senior management to maintain the success of the firm as it continues to grow and develop,' Schwarzman continued.

Schwarzman will become chairman and chief executive officer. He has served as CEO of the firm since its inception in 1985. Peterson, previously chairman of the firm, has been named to the newly created post of senior chairman.

Hamilton (Tony) James, who previously held the post of vice chairman, will become president. Since James joined Blackstone from CSFB in 2002, the growth of the firm has accelerated, Blackstone said in a statement.

His promotion to what appears a chief executive-in-waiting position is unusual in the sense that private equity firms typically address succession issues by bringing up from within the organisation to demonstrate the cultural stability of the transition. But this is counterbalanced by the fact that he has immense experience in private equity at blue chip organisations.

The Management Committee of the firm will remain unchanged with J Tomilson Hill, Mark Gallogly and Michael Puglisi joining Messrs Peterson, Schwarzman and James.

The portfolio companies in which Blackstone's private equity group has equity participation have combined revenues in excess of $55bn. The firm's most recent private equity fund closed in 2002 at $6.45bn and the firm is expected to raise a new fund in 2005.

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