Steve Schwarzman Says Harvard Admitted Rejecting Him Was Mistake

Steve Schwarzman, chief executive officer and co-founder of Blackstone, spoke with Bloomberg Television’s Eric Schatzker and Stephanie Ruhle about his decision to give $150 million to Yale University for a student center.

Schwarzman said a former admission dean of Harvard College told him it was a mistake to have rejected him as an undergraduate: “My number one choice was Harvard, and I didn’t get in. This is hard to believe, but I actually dialed the Dean of Admissions at Harvard and got him on the phone. This was like dialing god. And suggested maybe he wanted to accept me. And he said, I’m sorry, we not taking anybody off the waiting list. Where else were you admitted? And I told him at Yale. He said, well you should go there.”

He added “Actually, [the Deal of Admissions] wrote me a few years ago saying, I guess we got that one wrong.”

Steve Schwarzman

Schwarzman Gives Yale $150 Million for Student Center

ERIK SCHATZKER: Meantime, everyone, I have found someone else who is no stranger to philanthropy, and he happens to be sitting right here. It’s Blackstone CEO, Steve Schwarzman. Just yesterday Steve announced that he is giving $150 million to his alma mater, Yale University, to establish a social and cultural hub, and also to renovate the Commons building, a historic building there. It’s one of the largest gifts of its kind ever.

STEPHANIE RUHLE: Extraordinary.

SCHATZKER: Steve, philanthropy is something that you have made your name in. Let’s start with Yale. Why the gift to Yale?

STEVE SCHWARZMAN: Well I went to Yale. And when I showed up I was a pretty naive kid from a public high school outside of Philadelphia. And I knew no one at Yale, I mean literally no one. They had 8,000 people there, 4,000 undergraduates, 4,000 graduates, plus faculty, plus administration. And — and I had never been in a large place where I knew absolutely no one.

SCHATZKER: So you feel indebted for the experience that you had there?

STEVE SCHWARZMAN: Well, more than indebted. I mean I learned all kinds of important things in terms of change values, giving back, service to your community, to your country.

RUHLE: How did you learn that at Yale?

STEVE SCHWARZMAN: Because Yale had that tradition. And I was raised in a place just like a normal high school kid. I wasn’t aware that was, in effect, an obligation for people who have done well. And so I internalized that, and it also helped teach to me how to think and changed the course of my life.

RUHLE: Hold on. Was Yale your number one choice? When you were in high school, was it your dream to go to Yale?

STEVE SCHWARZMAN: Actually my number one choice was Harvard, and I didn’t get in. And —

RUHLE: Damn, Harvard, $150 large you didn’t get.

STEVE SCHWARZMAN: I actually — this is — this is hard to believe, but I actually dialed the Dean of Admissions at Harvard and got him on the phone. This was like dialing god.

RUHLE: No way.

STEVE SCHWARZMAN: And — and suggested maybe he wanted to accept me. And — and he said, I’m sorry, we not taking anybody off the waiting list. Where else were you admitted? And I told him at Yale. He said, well you should go there. You will have a great experience. And he was right. I did.

RUHLE: Not that you’ll say it, do you remember what his name is? Don’t you kind of want to call him and say, how do you like me now?

STEVE SCHWARZMAN: Actually — actually, he wrote me —

RUHLE: No way.

STEVE SCHWARZMAN: — a few years ago saying, I guess we got that one wrong.

RUHLE: No he didn’t.

SCHATZKER: Among the bigger mistakes.

RUHLE: Really it’s pretty amazing that he would remember a 17-year-old kid called him and then 35 years later, he still follows you and says, guess we should have accepted him.

STEVE SCHWARZMAN: Well apparently he told me, I don’t get calls from 17 year olds.

SCHATZKER: Oh. So that was a revelation.

STEVE SCHWARZMAN: And I was very nervous making that call from — from the high school gymnasium with a bunch of quarters on a payphone.

RUHLE: No way.


RUHLE: No way.


SCHATZKER: Steve, how does a gift like this come about? Do you decide I want to give something back to Yale, or presumably you’re in close contact with the folks at Yale. Do they pick up the phone, or have dinner with Steve Schwarzman and say, Steve, we really to renovate the Commons building and we really need a social and cultural hub? Will you underwrite it?

STEVE SCHWARZMAN: Well it’s both. I’ve looked at giving some substantial money to Yale over time, but I’ve found in life, people — people tend to find me now. This is not a surprise. And so they — they approached me with a few alternatives of things that might be of interest. And this one particularly was of interest to me.

RUHLE: But, Steve, isn’t that the challenge? People find you. You are one of the most successful people in the financial industry, especially here in New York. You must get calls every single day from universities, worthy causes, medical research. How do you decide where to put this money?

STEVE SCHWARZMAN: Stephanie, that’s really a great question, because and it’s not exclusive to me, but people who sort of are in my general situation. We do get calls like that all the time. And it’s very difficult to figure out which one of the many, many worthy things you support. And — and so everybody needs to have some focus, and — and that means some things don’t get supported you’d love to.

SCHATZKER: Well you, and Bill Gross and others too. I mentioned that I went out to see Bill Gross. He told me, and I believe it’s for the first time, the first time he ever tallied it up for anybody that over the course of his life he’s given away $700 million. He’s still got lots to give away, as do you. Do you have any idea how much, how philanthropic you’ve been to date?

STEVE SCHWARZMAN: Actually, I don’t — I don’t keep score. I don’t view this as — as like a game where there’s a winning score. Over time —

SCHATZKER: I mean there’s $300 million to the Schwarzman Scholars, plus more recently. There’s this gift, the New York Public Library. It adds up, doesn’t it?

STEVE SCHWARZMAN: Yes. But it’s supposed to add up, because if you — if you do well, then you have an obligation to society to — to help other people. I think my grandfather did that, and you can’t take all this stuff with you.

SCHATZKER: Will you give it — Bill plans to give it all away. He and his wife, Sue, if they’re not going to give it all away while they’re alive, they’ll give the rest to their foundation and their kids will be in charge with giving it away after they’re gone. Will you do the same thing?

STEVE SCHWARZMAN: Well I think ultimately you have got to find a way to — to dispose of — of most of your wealth. The tax system really encourages that. And — and if you — if you create large companies and own significant ownerships, then you have to dispose of that in some way for the good of society.

RUHLE: At what point in your career — you said you sort of learned these lessons when you were at Yale, and from your grandfather, but at what point in your career did you start to say philanthropy was going to make a difference? Was it before you had so much money that it was obvious? I mean tonight is the Robin Hood benefit. One of the issues that Robin Hood faces is the biggest dogs on the street give so much to Robin Hood, but they have this big gap under people who don’t have tons of money, but people who aren’t devoting their lives to civic duty, who just aren’t giving. So when did you really make a commitment?

STEVE SCHWARZMAN: Well this is like a habit. And if —

RUHLE: It’s a good habit.

STEVE SCHWARZMAN: — if you watch your grandfather do things like that when you’re a little boy, you — you start doing this, really as soon as you graduate from school. And at Blackstone, for example, we have many, many programs were people can be actively involved and also give money.

One of — one of our guys just hit me up for a bunch of matching money, which I did with Tony James from the firm, for — for some bike competition for leukemia. And we have these things constantly. And the amount of money that people can give is geared to what they make. And we don’t pressure anybody.

RUHLE: Then does it disappoint you that populous opinion still looks at the financial industry, yes, banks more than private equity, but as public enemy number one, and doesn’t think about the corporate social responsibility or just all that you do?

STEVE SCHWARZMAN: Well we have a complicated financial, well excuse me, complicated political brew in — in today’s world, and we’re just like one part of it. And we’re not politicians, so we don’t get the airtime. We don’t get a chance to really control that dialogue.

RUHLE: You can have it whenever you want.

SCHATZKER: Steve, your ability to give depends in large part on what happens at Blackstone, the firm you co-founded and the firm you still run. What we’re witnessing right now in the bond market appears to be something. We don’t know if, as some people have put it, it’s the beginning of the bear market in bonds, but there has been a selloff. And I wonder as you look at what’s happening in public debt markets, do you worry at all about Blackstone’s ability to generate returns in the future because to the degree that interest rates rise, of course, leverage becomes more expensive. And leverage is one of the key tools that you use to make money.

STEVE SCHWARZMAN: Well it depends, Erik, why interest rates are going up. If interest rates are going up because economies are stronger the way they are in Europe, then —

SCHATZKER: You believe that’s why it’s happening, that one is a strengthening and we’re seeing and incipient inflation?

STEVE SCHWARZMAN: Well it’s a combination of economies strengthening, and — and markets that were really driven to low interest rates by quantitative easing. And sometimes markets overshoot. That’s — that’s normal.

SCHATZKER: Is that what happened in Europe with negative interest rates?

STEVE SCHWARZMAN: I think I have been doing this for over 40 years. And this is only the second time in my life I have met negative interest rates. And the first time it was just in Switzerland, and it was a long time ago. So seeing a lot of countries with negative interest rates is really quite odd.

RUHLE: And what does it mean to you?

STEVE SCHWARZMAN: Well it means that you had relatively fragile markets with a giant buyer called the ECB. And they were busy buying. And — and that drives yields to unrealistically low levels. The idea that you pay somebody interest who issues a bond, as the buyer of the bond is — is actually sort of almost completely unprecedented.

SCHATZKER: Your investors don’t seem to be put off by it. Your newest buyout fund has topped $17 billion. And so far as I understand, you’re still fundraising.

STEVE SCHWARZMAN: I don’t think we’re allowed to comment on that. My — my lawyers sort of do something bad to me if I comment, so — so I can’t comment. You can comment.

RUHLE: There you go. I can say that’s a whole lot of money. Steve, congratulations. Congratulations, Yale, you lucky dog, great having you on.

SCHATZKER: And good to see you. Thank you.

RUHLE: Thank you so much. Thank you.

SCHATZKER: (INAUDIBLE). Steve, thank you so much.

RUHLE: Blackstone CEO, Steve Schwarzman.