Respected on Wall Street for building one of the largest private equity firms out of just $400,000 in 1985, Blackstone CEO Stephen Schwarzman has developed a reputation as a skilled deal-maker who now boasts over $360 billion in assets under management.
Navigating deals like a $30 billion real estate sale with General Electric in 2015 or a $26 billion buyout of Hilton Hotels in 2007, Schwarzman once told the Wall Street Journal he views each agreement as a contest to the death. "I always think about what will kill off the other bidder," he said.
Speaking with CNBC, the billionaire reveals some of his best practices in the art of dealmaking that have helped him over his career:
Find your 'zone of fairness'
"Deals really have to do with the overlap of what one side wants and the other side wants, and it's really just the discovery of where that overlap is and how you decide to get there," he says. "And so I always try and do something that's relatively quick rather than drawn out because you should know where you want to be and get there relatively fast, but with enough drama so that the other side thinks they're doing something.
"It's called the zone of fairness."
Transacting at a level that is more beneficial to your side than what exists within that zone is seldom possible, Schwarzman notes, because someone on the other side almost always ultimately wakes up.
"Being reasonably direct about what you're doing, being comfortable, is the best way to do things."
Put in the time
Schwarzman says it takes a while to reach a level of comfort at the negotiating table. He spent 40 years making adjustments in tactics and measures, he says, before establishing a reputation and accumulating a certain amount of confidence.
"Always, always make good on what you say," he says. "It gets easier in a way the more you do things."
Read the people opposite you
"You have to be able to read the people who are opposite you and and there are all kinds of ways of doing that from listening to intonations in their voice to observing them to see whether they're getting nervous or uncomfortable," Schwarzman says.
"Watch their eyes to see whether they're narrowing — basically, measuring stress."
Remember, you can always slow down
"When I was much younger, I realized that when I was handling something very large and I was on my own doing that that my breathing rate would increase and that would affect my ability to think as well as I normally would," the CEO says. "So when that starts happening, I slow down.
"You never have to speed up. You can always slow down, and when it regards money people will wait for the answer from your side."
Following these steps have helped make his seat at the table a place he wants to be.
"A lot of people don't like that to be in that position, but I do," Schwarzman says.