As the first 110 Schwarzman scholars get set for graduation next month, the billionaire founder of the program is looking back on the lessons he's learned steering it through its start-up phase.
The program has nearly reached $500 million toward a new goal of $550 million in fundraising, with money coming from a variety of wealthy Chinese, American and European families, corporations and philanthropies. Stephen Schwarzman, co-founder of private equity giant Blackstone and namesake of the program, put in $100 million of his own money, and since then more than 100 other donors have followed.
Schwarzman scholars, chosen from 3,000 applicants from around the world, spend a year studying for a master's degree and living in Beijing at Tsinghua University, which hosts the program. Schwarzman has ties to the institution because he sat on its business school's board. And China is important to Blackstone, having invested $3 billion in its 2007 initial public offering.
In an interview, Schwarzman said the process of building the program and getting it up and running has been "extremely gratifying," adding "when you start with no buildings, no faculty and no money, to basically do this in China is pretty much unprecedented."
Of course, there have been some lessons. Class hours may be reduced to two hours from three, and the orientation for new students will also be shortened. The food is being improved. Some things were more expensive than expected. As with any building project, Schwarzman said, "it takes two times as long and costs two times as much."
And the students selected for the first class were unexpectedly athletic. They won the university's track and field intramural championship as well as the men's soccer and women's basketball intramural championships. "This is pretty astonishing," he said.
The money raised will pay for scholarships for as many as 200 students each year permanently, as well as go to cover the costs of staffing, recruiting, travel and other expenses like the construction of the student center and academic building. Blackstone, along with Tsinghua University, manages the money without taking any fees. Schwarzman would not discuss how the money is invested.
Top donors include the British energy giant BP, China's real estate giant CFLD, the Chinese conglomerate HNA Group, The Dalio Foundation and SoftBank founder Masayoshi Son, each putting in at least $25 million.
Billionaires and their families include Los Angeles-based Chan Soon-Shiong Family Foundation, the Whitney family, the retired industrialist Hall Wendel Jr., Louis Dreyfus Chairman Margarita Louis-Dreyfus, and money managers Howard Marks, John Guffey (through his family foundation) and Daniel Loeb.
Blackstone is also represented beyond Schwarzman, including Chinh Chu, who made his billions as dealmaker for the firm, and John Schrieber, founder of its real estate investment management business.
While some of the donors have sponsored aspects of the program, others have chosen to sponsor individual students. Fifteen scholarships can be covered with $2.5 million.
The program is run by the British academic Nigel Thrift as executive director. It is modeled on the Rhodes Scholarship program at Oxford University, a scholarship founded by the 19th-century British mining magnate Cecil Rhodes. That program, founded in 1903, is a two-year course of study for 100 students from more than 60 countries. It recently expanded its own fundraising, to more than $300 million.
Schwarzman said the idea was to reduce tensions in the West caused by China's growing economic power and influence — bring in some very gifted students to learn about life in China from the inside and they will take that perspective back to their home countries to influence others to think openly. All of the donors are companies or people who have business in China or touch the country in some way.
"The objective was to make sure populist anger didn't wind up triggering a very dangerous confrontation" between China and the West, he said. "Engagement with China around the world is critical for the development of global relations," he said.
Schwarzman says he spends about 10 percent of his time on the program, hoping it will continue to thrive into its second year. "There were years where it took appreciably more" time, he said.