Backing Unions At Blackstone

Breaking Insight From WSJ.com

'A Pension Is a Promise' As Private-Equity Firm Goes to Bat for Clients

 By MICHAEL CORKERY

Even Stephen Schwarzman knows his master.
On Wednesday, Mr. Schwarzman's private-equity firm, Blackstone Group, put out a statement making it abundantly clear who that master is: "Blackstone's view on public employee pensions is clear and unambiguous. We believe a pension is a promise. Working men and women should not have to worry about their retirement security after years of service to their communities. We oppose scape-goating public employees by blaming them for the structural budget deficits that cities and states face."
About $37 of every $100 of Blackstone's $111 billion investment pool comes from state and local pension plans.
The statement comes as Blackstone finds itself entangled in one of the nation's hot-button issues. Governors and mayors across the nation are rallying voters and businesses in an effort to roll back public-pension benefits.
Public-employee unions, in turn, have been trying to drum up their own supporters with candlelight vigils and local advertising campaigns. But they are facing steep, high-profile challenges, including from traditional Democratic allies.
Some union members had begun to wonder which side Blackstone was on.
About a year ago, the firm's senior adviser Byron Wien reportedly called benefits for state workers "too generous," saying, "We literally can't afford the benefits we have given our retirees in state and local governments. And we have to change that."
Earlier this month, a group of trustees of the New York City pension fund, including several union members, canceled a meeting with Blackstone, partly over concern about the firm's stance on pensions, according to a person familiar with the matter.
Wednesday's statement made it clear the unions still have a powerful friend on Wall Street: "We at Blackstone are committed to helping public employees retire with confidence in the strength and reliability of their pensions."