When Blackstone Group LP's top executives learned last week that
they were losing their longtime chief financial officer, they
eschewed a lengthy search and went with one of their most-tenured
deal makers.
The world's largest private-equity firm said last week that
Michael Chae would become its finance chief next month when
Laurence Tosi, Blackstone's CFO since 2008, leaves for the same
role at Airbnb Inc.
Leaders at Blackstone, which manages roughly $333 billion on
behalf of pensions, endowments and wealthy individuals, decided the
company's CFO should be someone who could potentially run the firm,
and that anyone in that position must have an investing background,
according to people familiar with the hire.
In Mr. Chae, 46 years old, the firm chose one of its most
experienced deal makers and trouble shooters. He joined Blackstone
in 1997, before the global firm—housed then in a single Manhattan
office—even disclosed its assets under management.
Becoming CFO "represents a natural progression" of his career at
Blackstone, Mr. Chae said in an interview Monday. "Having worked
across our businesses and regions as an investor, to be able to
bring that experience and knowledge to driving the operations of
the firm as a whole is an exciting opportunity," he said.
Mr. Chae played a central role in some of the firm's largest and
most lucrative private-equity investments, including those
involving arts-and-crafts retailer Michaels Companies Inc.,
hotelier Hilton Worldwide Holdings Inc. and television-ratings firm
Nielsen NV.
"His investing background is an extremely helpful element to his
credibility as a CFO," said John Waldron, co-head of investment
banking at Goldman Sachs Group Inc., a former classmate of Mr.
Chae's at the Lawrenceville School, an elite New Jersey high
school. "The combination of being well-liked externally and
credible internally makes him a great choice."
In 2010 the firm dispatched Mr. Chae to Hong Kong to straighten
out its then-sputtering business in Asia. He returned to New York
last year to resume his role spearheading private-equity deals in
media and telecommunications while retaining oversight of
Blackstone's Asia business.
Currently he is involved with a relatively new group within the
firm that has a broad mandate to invest in niches that don't fit
its other business lines and is shepherding the spinout of the
firm's corporate advisory unit into a separate public company.
"He's a broad guy; he's seen a lot," said David Calhoun, who was
recruited by Mr. Chae to be CEO of Nielsen, after Blackstone bought
the company, and who joined Blackstone early last year as senior
managing director and works with the companies in which the firm
invests. "I can't imagine a technical aspect of our CFO role that
he can't master."
Mr. Tosi is credited with leaving behind a "best in class"
finance operation at Blackstone, making for a smooth transition to
Mr. Chae, said Michael Kim, an analyst with Sandler O'Neill +
Partners LP. Mr. Kim points to the seamless CFO swap last year at
rival Carlyle Group LP, which promoted insider Curtis Buser to
replace Adena Friedman, who rejoined Nasdaq OMX Group Inc. after
three years at the private-equity firm.
"While it's always difficult to see a highly capable
professional depart, we expect it will be business as usual for
Blackstone," Sanford C. Bernstein analyst Luke Montgomery wrote in
a note to clients.
Vipal Monga contributed to this article.
Write to Ryan Dezember at ryan.dezember@wsj.com
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