Stephen Schwarzman On His New Scholars Program: ‘I Love Picking People’
The Blackstone founder tells Daniel Gross he’s looking for ‘future thought leaders’ for his new program.
The Schwarzman. It doesn’t have quite the same ring as the Rhodes or the Marshall. Yet.
Last week Blackstone Group co-founder Stephen Schwarzman announced the creation of the eponymous Schwarzman Scholars program, which will fund scholarships to send bright young Americans to study at Tsinghua University in Beijing. The idea? Take a bunch of members of the future elite in their protean state and give them exposure to what is now the world’s most populous country and what is likely to be the world’s largest economy. You don’t have to be an Asian-studies major, or know Mandarin, or be interested in economics and business. “We’re looking for thought leaders, and whether they’ve evidenced interest in Asia is not particularly germane,” Schwarzman tells The Daily Beast.
Schwarzman, a 66-year-old billionaire, has deep connections in China. The country’s sovereign wealth fund, China Investment Corporation, in 2007 paid $3 billion for a big chunk of Blackstone Group. (The investment is so far a losing one for the fund.) Schwarzman is on the advisory board of the school of management at Tsinghua University, which was founded in 1911 to prepare Chinese students to study in the U.S. Blackstone is an active investor in China. “The Chinese can say my last name, which is a quite a surprise to me,” Schwarzman said. (Stephen is apparently a little more difficult, as he has a Chinese first name.)
Tsinghua’s president first approached Schwarzman in 2010 and asked him to consider creating a program that would attract more international students for the university’s 100th anniversary in 2011. “The problem was addressing the potential tensions that would develop between China and the developed world, as a result of China growing at two to three times the rate of the developed world,” he said. Rolling this trend forward, Schwarzman foresaw an “increasing probability of trade tensions and economic tensions and potentially military tensions.”
One way to alleviate tensions would be to create something like the Rhodes Scholarship Program, which sends 32 American students to British universities for a year and whose alumni include former president Bill Clinton. “We’ll take those types of candidates to China so that they get immersed in that environment, learn to understand it on a firsthand basis, and give them a special look at it,” Schwarzman says. Beyond taking classes, Schwarzman scholars will meet Chinese leaders, travel to various regions of China, and have a mentor assigned to them. “They’ll go to the mentor’s place of work, see how businesses operate, and meet their families,” Schwarzman says. “And that would be another mechanism for these students getting a unique look besides getting a master’s degree.” The first class of scholars will fly over to Beijing—in coach, Schwarzman notes—in June 2016.
The program is just getting started (the website can be seen here) and is seeking to raise $300 million. Schwarzman kicked in $100 million; donors including companies such as BP, Boeing, General Electric, JPMorgan Chase, and people like hedge-fund managers Ray Dalio of Bridgewater Associates have committed another $100 million; and Schwarzman is looking for $100 million more. In classic private equity fashion, Schwarzman has leveraged his contribution into a naming opportunity. (His name is also on the main building of the New York Public Library, to which he contributed $100 million.)
There is, of course, a big difference between the Schwarzman Scholarship on one hand and the Rhodes and Marshall Scholarships on the other: the destination. Many American universities have rushed into new geographic areas that have not been traditional outposts of freedom of expression and academic inquiry—i.e., the Persian Gulf and Asia. Schwarzman said he has no concerns about sending students to a Chinese university for graduate study. “They’ve made the development of their universities into world-scale standards as a major governmental priority,” he said. “And to do that and attract Western students of the type that we are discussing, there has to be free and open discourse in the classroom.” Sure, he acknowledges, “there will be some limitations as they encounter the greater society, and that’s part of the educational experience.”
While it’s still very much a startup, the program has the trappings of an establishment operation. Chinese President Xi Jinping endorsed the effort in a letter. Vice Premier Liu Yandong attended the ceremony announcing the initiative. Schwarzman has hired Robert A.M. Stern, the renowned architect who is dean of the Yale School of Architecture, to design a building on the leafy campus of Tsinghua, where the Schwarzman Scholars will live.
The scholarship covers tuition as well as living expenses. And Schwarzman plans to play a role in selecting students. “I love picking people,” he says. “I started Blackstone, and we had no people, and now we have with our portfolio companies about 750,000 people all over the world. Everybody who is at a senior level has ultimately been picked by me.”
So what will it take to be a Schwarzman? “I have a pretty firm view of the type of student we’re looking for,” he said. “We’re looking for intelligent, successful students with a creative entrepreneurial sense who we can identify as future thought leaders. That’s the type of thing that you know it when you see it.”