DATE: June 25TH
TIME: 1:40 PM ET
The following is the unofficial transcript of a CNBC interview with the Blackstone Group's first investor, Garnett Keith, on CNBC's "Power Lunch" live from The Four Seasons Restaurant today at 1:40 PM ET. All references must be sourced to CNBC.
In the interview, Garnett Keith, Blackstone's first investor and now Chairman and CEO of SeaBridge Investment Advisors, talks about how in 1985, as Prudential CEO, he was the first investor in The Blackstone Group. When 488 potential investors said "no" to Steve Schwartzman and Pete Peterson, co-founders of The Blackstone Group, Keith offered a $100 million investment. Schwartzman and Keith sealed the deal over a tuna fish sandwich. Peterson makes a surprise appearance during the interview and says, "I will just say to Garnett Keith, my dear friend, he was there when Stephen Schwartzman and I needed him and I will never forget it. My gratitude is unlimited."
SUE: WELCOME BACK TO "POWER LUNCH" WE ARE IN THE SAME BAR AREA HERE AT THE FOUR SEASONS RESTAURANT WHERE IF YOU WANT TO HAVE A QUICK BITE TO EAT, MAY BE YOUR BY YOURSELF YOU CAN COME TO THE BAR AND SIT DOWN BUT WE'RE JOINED BY BUT I HAVE BEEN CALLING OUR MYSTERY GUEST TODAY. GARNETT KEITH JOINS AS HE IS THE NOW PETTUS BRIDGE INVESTMENT. PLEASURE TO HAVE YOU HERE. THIS IS CERTAINLY NOT YOUR CLAIM TO FAME BUT IT IS AN INTERESTING PORTION OF YOUR LIFE. YOU COULD BE CALLED THE FIRST INVESTOR IN THE BLACKSTONE IPO.
GARNETT KEITH: I WAS. STEVE HAS BEEN VERY GENEROUS WITH HIS COMMENT WITH TWO MEN WAS ON THE STREETS OF NEW WORK WE TOOK THEM IN AND GAVE THEM LUNCH AND $100 MILLION.
SUE: I LIKE TO SAY AT ALL
HAPPENED AT THIS PARTICULAR
MEAL. PROBABLY NOT THIS FANCY. A LITTLE TUNA SANDWICH BECAUSE AS I UNDERSTAND IT, THE DEAL WAS DONE OVER A NICE LITTLE ALBACORE TUNA SANDWICH.
GARNETT: KEY REMINDS US THAT THE MENUS DON'T HAVE PRICES, THEY HAVE SALARIES.
SUE: YOU DID NOT RESCUE IS CERTAINLY BUT YOU HAVE FAITH IN THEM WHEN HE SAID HE HAD BEEN BEATING THE STREETS GOING TO FRIENDS AND COLLEAGUES TRYING TO START BLACKSTONE AND IT WAS THE HARDEST THING HE HAD EVER DONE. WHY DID YOU INVEST YOUR WITH CREDENTIAL AT THE TIME. WHY DID YOU DECIDE TO MAKE A MOVE?
GARNETT: THESE WERE DISTINGUISHED MEN. THAT THE SECRETARY OF COMMERCE , LEHMAN 82 WAS NOT AN EASY SHOT TO RUN. AND STEVE SCHWARTZMAN WAS VERY BRIGHT U.S. HAD OF AND A DAY. THE QUESTION WAS COULD THEY PUT TOGETHER A TEAM TO DO THIS? I THINK THE ANSWER IS PRETTY CLEARLY THEN AND NOW IS YES. THE SECOND FACTOR, AND THIS IS NOT KNOWN, I TRAINED AND LEARNED UNDER REMAND CHARLES AND RAY CHARLES IS KNOWN OF THE KING OF PRIVATE PLACEMENTS IN THE '60S AND '70S. HE TOOK EARLY RETIREMENT IN 1980 AND WENT TO WORK FOR PETERSON AT BLACKSTONE PROPOSAL MY RESPECT AND AFFECTION FOR RAY CHARLES MADE ME COME INTO THIS LUNCH WITH A LOT DISPOSITION THAT THESE GUYS CAN PUT TOGETHER AN LBO TEAM. WE WERE WORKING WITH THE HENRY KRAVIS AND KOHLBERG AT KKR'S WE THOUGHT WE KNEW THE BUSINESS BUT ALSO THEIR WE ARE.