Gray on shortlist to lead Blackstone

The New York-based private equity firm’s head of real estate is one of six executives being considered as a possible successor to current CEO Stephen Schwartzman.

Jonathan Gray, The Blackstone Group’s global head of real estate, is one of six executives at the private equity and real estate firm who are said to be the most likely to succeed current chief executive officer Stephen Schwartzman. 

Citing sources familiar with the matter, Reuters is reporting that Gray is one of six candidates who could potentially take over as CEO after Schwartzman retires. The other possible successors are Joe Baratta, the recently-appointed head of global private equity; Bennett Goodman, co-founder of the credit business; Tom Hill, who runs the hedge funds group; Laurence Tosi, chief financial officer; and Joan Solotar, a senior managing director in the public markets group.

Blackstone declined to comment, but a source familiar with the matter said Schwartzman has no intention of retiring anytime soon, and that Tony James, Blackstone’s president and chief operating officer, is currently poised to succeed Schwartzman. However, the source said it was possible one of the six candidates would take the helm should Schwartzman and James both step down.

At 42, Gray is one of the youngest possible Schwartzman successors, second to Baratta, who is 41. Earlier this year, Gray was promoted from global co-head of real estate to its sole head, and was named to Blackstone’s main board of directors shortly thereafter.  

Gray has had a major role in expanding Blackstone’s real estate division, which James said in an April earnings call has now become the firm’s largest business.  In February 2007, Gray oversaw Blackstone’s takeover of Equity Office Properties Trust for $23 billion in one of the largest leveraged buyouts in history. Following the global financial crisis, Gray also shepherded Blackstone’s $9.4 billion acquisition of Australian property firm Centro Property Group’s 600-strong US retail portfolio and the purchase of a 10.1 million-square-foot suburban office portfolio in the US from Duke Realty Corporation for $1.08 billion. 

Blackstone currently is raising capital for its Blackstone Real Estate Partners VII global opportunistic fund, which already has attracted $12 billion in equity commitments and is on track to hit its $13 billion hard cap.