Today, we will be diving into Blackstone, the world’s largest alternative asset manager. Founded in 1985 as a boutique M&A advisory business with $400,000 of seed capital. The firm now manages over $600 billion across private equity, real estate, credit, and hedge fund strategies. In this breakdown, we will start by discussing Blackstone’s business model and how it has taken advantage of a structural tailwind in the form of low bond yields. Then, we’ll dive into the different ways Blackstone earns money, how that’s changing, and what else management has done to make the business more shareholder-friendly. Finally, we’ll cover Blackstone’s competitive strengths, their brand and scale explaining how they were built and how they’re deployed today. To break down Blackstone, Zack Fuss is joined by Marc Rubinstein, former hedge fund manager and now the writer of Net Interest.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. -----   Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss   Show Notes [00:02:35] - [First question] - What is Blackstone, their history, and what their scale is today [00:04:29] - Their core competencies in the beginning and what it enabled them to do  [00:05:57] - Examples of their early transactions that allowed them to grow their funds [00:07:39] - Overview of the first principles of how private equity funds make money [00:09:49] - What has allowed Blackstone to grow so large over the last thirty-five years [00:12:30] - Things that make alternative asset management a large and lucrative industry  [00:14:28] - Overview of revenue streams and returns to shareholders [00:17:30] - Analysis of their corporate private equity, real estate, hedge funds, and credit [00:21:00] - Why alternative asset managers have been so attracted to insurance companies  [00:22:40] - Partners Blackstone might find for funding and financing [00:24:44] - Reasons why Blackstone would consider an IPO [00:26:15] - How an investor would evaluate Blackstone versus Berkshire Hathaway [00:29:17] - Ways Blackstone dispels the ‘barbarians at the gate’ stigma around private equity [00:31:12] - The importance of Steve Schwarzman and thoughts on new leadership [00:33:31] - Building a company culture in asset management that creates longevity [00:35:42] - What makes Blackstone so successful writ large [00:37:54] - Emergence of neo-banks and potential threats of regulation and oversight [00:39:05] - The one thing that allows them to always find new opportunities and succeed [00:41:03] - Lessons for investors when studying Blackstone’s story

Today, we will be breaking down pet care giant, Petco. Founded in 1965 as a mail-order business, Petco has evolved into a one-stop-shop pet care solution across its nearly 1,500 locations.   To help break down Petco, I am joined by Greg Kamstra, current CEO of pet care provider, Riverdog and former private equity investor. We will discuss how Petco evolved into its current big-box model, how pet care store economics differ from grocery economics, and what impact e-commerce has had on the industry. It’s always fascinating to learn about secular growth stories, and the pet care industry falls into that category. I hope you enjoy this breakdown of Petco.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   -----   Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss   Show Notes [00:02:19] - [First question] - What is Petco? [00:03:06] - How much of their business is solely eCommerce [00:03:40] - The scale of the market today and what that space looks like [00:05:24] - Pet ownership in the US and how much it’s grown over the decades [00:06:28] - The spend-per-pet metric and how it continues to grow [00:06:49] - Sales channels for Petco and the big players in this industry [00:07:31] - When and how Petco started and unique insights that led to starting the business [00:09:09] - Unit economics for specialty brands versus generic brands [00:09:42] - General thoughts on the economics of Petco [00:11:03] - Viewing their revenue and customer base through the lens of a single-store [00:13:15] - How they drive same-store sales growth and customer frequency [00:16:22] - The ways they’ve invested in services to incentivize return customers  [00:18:13] - Conventional retail strategies and how they’ve performed for Petco [00:20:42] - Ways they are trying to compete with their eCommerce competitors [00:23:50] - What their eCommerce growth could look like over the next few years [00:25:20] - Early days of a mobile app and working on their digital-first footprint [00:26:18] - How good of a deal Chewy was for Petsmart [00:27:48] - Other big deals Petco has made and why they’ve mattered [00:28:52] - Unique private equity aspects of Petco [00:31:07] - What happened to their business during the pandemic and what trends might be here to stay  [00:32:03] - How many non-pet owners became pet owners because of COVID-19 [00:33:11] - Reasons why their market cap could double in the next five to ten years [00:34:19] - Reasons why their market cap could be cut in half over the coming years [00:35:10] - Lessons for builders when studying Petco’s story [00:37:14] - Lessons for investors when studying Petco’s story