By Dan Primack
September 28, 2010

Last night I finished up “King of Capital,” a new book on The Blackstone Group by David Carry and John E. Morris (available next week). Kind of reads like a broad history of private equity, with Blackstone as the touchstone.

Pretty sympathetic toward the firm — and toward PE in general — although Steve Schwarzman takes some minor hits for his tin ear and quick temper. Oh, and David Stockman gets savaged.

Here are some pull-outs:

* The book suggests that Blackstone’s break-up with Larry Fink was partially caused by Schwarzman’s ongoing divorce negotiations. Basically, Fink wanted more economics for his group (now Blackrock) than Schwarzman thought he was entitled to receive.

* When Clayton Dubilier & Rice met with IBM chairman John Akers about the deal that would become Lexmark, Akers held up a copy of “Barbarians at the Gate,” and said: “The reason I am talking with you is because you are not mentioned in this book.”

* Bret Pearlman, on how Charter Communications overpaid for Blackstone’s cable industry companies: “We used to get up every morning and thank Paul Allen. Hallelujah!”

* Before hiring Tony James as firm president, Blackstone offered the job to Jimmy Lee.

* From an investment standpoint, James insisted that deal teams look at extreme best-case and worst-case scenarios. Schwarzman called them “tooth fairy scenarios.”

* When KKR went public in Amsterdam, more than a dozen U.S.-based PE firms readied similar offerings. Blackstone’s was code-named Project Panther.

* Blackstone’s deal for Equity Office was actually its third bite at the apple. Its original attempt included CalPERS as a co-investment partner.

* There is a lot about the birthday party. Oddly, no quotes from Schwarzman on the debacle (even though he was interviewed repeatedly for the book).

* Pete Peterson was not initially in favor of the IPO. By then, however, Peterson didn’t really much matter at Blackstone.

* Schwarzman didn’t pose for that infamous Fortune magazine cover. It was a stock photo, and used without his knowledge. As for the WSJ article with the $400 stone crabs, the interviews had happened months earlier, and Blackstone mistakenly thought the story had been killed.

* Tony James fell ill with kidney stones while pitching the IPO in Kuwait. He went to the pitch meetings anyway.

* The book talks a bit about the Hertz buyout, and tries to debunk the idea that it was a “quick flip.” To do so, it points out that the company’s revenue soared after being acquired by Carlyle, CD&R and Merrill Lynch. What it fails to note, however, is that much of that revenue ramp came courtesy of Hurricane Katrina, which necessitated an unprecedented amount of heavy equipment rentals.

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