Jonathan D. Gray

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Jon Gray
File:Jonathan Gray BLA.jpg
Born (1970-02-04) February 4, 1970 (age 54)
Highland Park, Illinois, U.S.
EducationUniversity of Pennsylvania (BA)
Occupation(s)President and COO of The Blackstone Group
Chairman of Hilton Worldwide
Political partyDemocratic
SpouseMindy Basser
Children4

Jonathan D. Gray (born February 4, 1970) is an American billionaire and the president and chief operating officer of Blackstone Group, a New York-based asset management firm.[2] He also serves as chairman of Hilton Worldwide.

Early life

Born in Highland Park, Illinois.[3][4] His father Allen Gray was an investment adviser and owned a small auto parts manufacturer on the West Side of Chicago (coincidentally named Blackstone Manufacturing); his mother Susan, remarried to his stepfather James Florsheim, ran a catering business.[5] His parents divorced when he was young.[5] In 1992, Gray graduated from the University of Pennsylvania (Penn) magna cum laude with a B.A. in English from the School of Arts & Sciences and a B.S. from the Wharton School.[5] He was elected Phi Beta Kappa.

Career

In 1992, Gray joined Blackstone's mergers and acquisitions and private equity group,[5] and was offered a position in the company's newly formed real estate private equity group shortly thereafter. He was made co-head of the real estate group in 2005 and named global head of real estate in 2011.[citation needed]

Today, Blackstone's real estate business is the largest opportunistic real estate investment manager in the world with $111 billion[6] of investor capital under management,[7] which includes a $16 billion global real estate fund and a $9 billion[8] European fund.[9]

As global head of real estate, Gray oversees a diverse portfolio including hotel, office, retail, industrial, and residential properties in the U.S., Europe, and Asia. Major holdings include Hilton Worldwide, Equity Office Properties, Invitation Homes, Logicor, and the leading owner of office space in India.[10] Gray currently serves as Chairman of the Board of Hilton Worldwide, which went public in December 2013. Blackstone's investment in Hilton was profiled in a September 2014 Bloomberg Businessweek cover story.[11] Gray was named in Fortune's "40 under 40,"[12] in 2009. In 2016, he ranked #1 on Commercial Observer's "Power 100" ranking of the most powerful people in New York City real estate.[13]

In 2008, Gray led the firm's efforts in establishing Blackstone Real Estate Debt Strategies (BREDS), provider of high yield debt capital. In 2013, BREDS launched Blackstone Mortgage Trust (BXMT) to provide first mortgage debt capital to real estate borrowers.

In November 2016, it was reported that Gray was under consideration as Treasury Secretary for the incoming presidential administration of Donald Trump.[14]

In February 2018, it was announced that Gray would become president and chief operating officer of Blackstone, replacing Hamilton "Tony" James.[15]

Controversies

Blackstone and Coronavirus

In March 2020, Blackstone--the world’s largest private equity firm--passed Goldman Sachs and Morgan Stanley to become the second most valuable firm on Wall Street behind BlackRock[16]; Forbes explained that investors likely believed Blackstone was in a “better position to capitalize on the tumult” of coronavirus. In December 2019, Schwarzman bragged about Blackstone’s ability to profit amid global economic collapse: “Since the financial crash almost all financial institutions shrunk—we grew six times.”[17] In April, Schwarzman said Blackstone would be “looking aggressively” to take advantage of investment opportunities that arose from the current economic crisis.[18][19]

In March 2020, Blackstone bought the rapidly-growing health insurance administration software company HealthEdge.[20] The following April, at the height of the coronavirus epidemic, Blackstone bought the medical staffing company TeamHealth and cut the hours of many emergency room staff.[21]

Gray and Blackstone have a big stake in the government’s administration of hotel and casino industry bailouts.[22] Gray led Blackstone’s purchase of Hilton in 2007, and is now Chairman of the Board of Hilton Worldwide.[23] Blackstone has invested billions in the Las Vegas casino industry, recently buying large stakes in three of MGM’s signature resorts.[24]

In late March, Crain’s reported that the shadow banking industry was “pushing hard” for federal help dealing with the economic impact of coronavirus.[25] After Dodd-Frank tightened restrictions on big banks, shadow banks--such as Blackstone--moved quickly to expand the risky behaviors no longer permitted in certain financial institutions. The shadow banking industry has seen an estimated 75% increase between 2010 and 2019.[26] Trump has shown a clear affinity for the industry; his Treasury Department produced an official report urging regulators to stop using the term “shadow banking” and instead use the term “market-based finance.”[27] The push echoed former Blackstone president Tony James’ assertion that “shadow banking really is just market-based finance.”[28]

Gray and other Blackstone Executives profited from 2008 Foreclosure Crisis

After the 2008 financial crisis, Gray built a company through Blackstone called Invitation Homes to buy foreclosed single-family houses and turn them into rentals.[29] Gray went on the “biggest home buying spree in history” after the foreclosure crisis, spending $10 billion in the company’s first four years.[30] Invitation Homes, with help from the federal government, became the largest single-family home rental company in the country.[31] Blackstone prioritized buying homes in good school districts expecting that renters would “more readily accept rent hikes to avoid moving.” Gray caused damaging structural change to the housing market with the large-scale flipping of single-family homes into rentals--effectively preventing millions of families’ chance to build wealth after the financial crisis and significantly decreasing the stock of affordable housing in the United States. The Danish Housing Minister called for the need for tighter regulations on Blackstone after the firm saw “an opportunity to push people out of their homes to get fast returns.”[32] Elizabeth Warren has criticized Blackstone for shamelessly profiting from the 2008 housing crisis.[33] Blackstone sold the last of its Invitation stake in late 2019 for a total reward of about $7 billion.[34]

The United Nations condemn Gray's Housing Project and Blackstone's Lobbying Efforts

Last year, a United Nations report found that Blackstone’s massive purchasing of single-family homes after the financial collapse had “devastating consequences.”[35] In addition to reshaping the housing market to benefit Wall Street over working people, Blackstone abused tenants with exorbitant fees, rent hikes, and aggressive eviction practices. Blackstone’s real estate practice had a disproportionate impact on communities of color, in part because the company targeted foreclosures resulting from subprime loans. Blackstone also contributed to widespread displacement from gentrification; the firm bought property in low-income neighborhoods, refurbished units, and exorbitantly increased rent.

The report also slammed Blackstone for “using its significant resources and political leverage to undermine domestic laws and policies that would in fact improve access to adequate Housing.” Blackstone spent at least $6.2 million to defeat California’s Proposition 10, which would have allowed cities to enact rent control. Blackstone is also a member of the Real Estate Roundtable, which spends millions on lobbying and political donations every year.[36]

Blackstone's Future: Gray Sees "Big White Spaces" For Involvement In Insurance, Infrastructure, Retail, and Data

In a 2018 interview about his recent promotion to President and COO of Blackstone, Gray explained that he saw “big white spaces” for future Blackstone involvement in the realms of insurance, infrastructure, retail, and data usage.[37]

Trump and Gray

In 2016, Trump discussed appointing Gray to be his Treasury Secretary.[38] While Gray withdrew his name from consideration, Blackstone has maintained close ties to the Trump administration. Blackstone founder and CEO Stephen Schwarzman is a close ally of Donald Trump and major Republican donor.[39]  When Blackstone restructured after Trump’s tax overhaul, Schwarzman’s net worth increased by nearly $6 billion in the first nine months.[40]

Philanthropy

The Gray Foundation was launched in 2014 with two distinct missions: Accelerating research, improving treatment and raising awareness for individuals who have inherited BRCA mutations; and maximizing access to education, healthcare and opportunity for low-income youth in New York City.[41]

Gray serves on the board of The Trinity School, as well as on the board of Harlem Village Academies,[42] a group of charter schools in New York City. Gray recently donated $10 million to purchase a building in northern Manhattan which will serve as the organization's second elementary school.[citation needed]

In May 2012, Gray and his wife, Mindy Gray, founded the Basser Research Center,[43] named in honor of Mindy's sister, Faith Basser, who died of ovarian cancer at age 44. The Grays donated $25 million to create the Basser Research Center, which focuses on cancer prevention, treatment, and research of BRCA-related, genetically-inherited cancers.[44] This donation also established the Basser Global Prize,[45] honoring cutting-edge cancer research. In January 2014, the Basser Research Center announced an additional $5 million gift from the couple to fund an external research grant program.[46] Town & Country (magazine) noted this work in its "Top Philanthropists of 2016" feature, in which the Grays were included.[47]

In November 2016, The New York Times reported on a $10 million donation from the Grays to finance a pilot program that creates college savings accounts for thousands of New York City public school kindergartners.[48] In May 2017, the Grays announced they would be donating $21 million to the Basser Center for BRCA at the University of Pennsylvania, bringing their total pledges to the initiative to $55 million.[49]

Personal life

In 1995, Gray married Mindy Basser at Temple Beth Zion Israel in Philadelphia; the ceremony was officiated by Rabbi Ira F. Stone.[50] He lives in Manhattan with his wife and their four daughters, Margo, Emma, Stella, and Tess.[5] In August 2013, Bloomberg estimated his net worth at just over $1.0 billion due to his owning 40.6 million Blackstone shares valued at $913 million combined with over $120 million in bonuses and salary.[44]

In 2016, Gray was named to Vanity Fair's "New Establishment" list.[51]

See also

References

  1. ^ "Forbes profile: Jonathan Gray". Forbes.com. Retrieved 18 May 2020.
  2. ^ "Jonathan Gray". Blackstone.com. Retrieved 2016-12-27.
  3. ^ [1]
  4. ^ "Blackstone Reports Record Year : Jonathan Gray's Real Estate Group Chips In 60% Of The Profits – Jewish Business News". Jewishbusinessnews.com. 2014-02-03. Retrieved 2016-12-27.
  5. ^ a b c d e New York Observer: "Jonathan Gray, Blackstone's Real Estate Wizard Behind the Curtain" By Matt Chaban August 17, 2011
  6. ^ Dividend, Sure (2017-10-25). "The Top 3 MLPs With 5%-Plus Yields (That Have Nothing To Do With Oil And Gas)". Seeking Alpha. Retrieved 2018-02-06.
  7. ^ "Blackstone Tops $100B in Global RE AUM". GlobeSt.com. 2016-04-21. Retrieved 2016-12-27.
  8. ^ Grant, Peter (2017-06-08). "Blackstone Group Raises €7.8 Billion for European Property Fund". Wall Street Journal. ISSN 0099-9660. Retrieved 2018-02-06.
  9. ^ "Blackstone Gets $15.8 Billion for Biggest Ever Real Estate Fund". Bloomberg. 2015-10-01. Retrieved 2016-12-27.
  10. ^ "Investment strategy: The new property barons". Ft.com. Retrieved 2016-12-27.
  11. ^ "Blackstone's Hilton Deal: Best Leveraged Buyout Ever - Bloomberg". Businessweek.com. Retrieved 2016-12-27.
  12. ^ "40 under 40 - Jonathan Gray (7) - FORTUNE". Money.cnn.com. Retrieved 2016-12-27.
  13. ^ "Power 100". Commercial Observer. 2016-04-20. Retrieved 2016-12-27.
  14. ^ Hui-Yong Yu. "Trump Said to Discuss Treasury Post With Blackstone's Gray". Bloomberg. Retrieved 2016-12-27.
  15. ^ "Blackstone's Homegrown Dealmaker Finally Makes It to the Top". Bloomberg.com. 2018-02-13. Retrieved 2018-02-16.
  16. ^ Gara, Antoine. "Blackstone Now More Valuable Than Goldman Sachs And Morgan Stanley Amid The Coronavirus Chaos". Forbes. Retrieved 2020-07-07.
  17. ^ Vardi, Nathan. "How 2019 Became The Best Year In Private Equity's History". Forbes. Retrieved 2020-07-07.
  18. ^ Perlberg, Heather (2020-04-07). "Steve Schwarzman Sees Virus Wiping $5 Trillion from GDP". www.bloomberg.com. Retrieved 2020-07-07.
  19. ^ Hirsch, Hugh Son,Alex Sherman,Lauren (2020-03-25). "Private equity eyes industries crippled by coronavirus: 'They have been waiting for this'". CNBC. Retrieved 2020-07-07.{{cite web}}: CS1 maint: multiple names: authors list (link)
  20. ^ Hirsch, Hugh Son,Alex Sherman,Lauren (2020-03-25). "Private equity eyes industries crippled by coronavirus: 'They have been waiting for this'". CNBC. Retrieved 2020-07-07.{{cite web}}: CS1 maint: multiple names: authors list (link)
  21. ^ Arnsdorf, Isaac. "Overwhelmed Hospitals Face a New Crisis: Staffing Firms Are Cutting Their Doctors' Hours and Pay". ProPublica. Retrieved 2020-07-07.
  22. ^ "Alternative Lenders Exposed to Hotels Amid Coronavirus - The Real Deal". The Real Deal New York. 2020-03-20. Retrieved 2020-07-07.
  23. ^ "Board of Directors". ir.hilton.com. Retrieved 2020-07-07.
  24. ^ "Blackstone rolls dice with $4.6B deal for MGM, Mandalay Bay | PitchBook". pitchbook.com. Retrieved 2020-07-07.
  25. ^ "Shadow banks, now too big to fail, seek government assistance". Crain's New York Business. 2020-03-25. Retrieved 2020-07-07.
  26. ^ Cox, Jeff (2019-04-11). "Shadow banking is now a $52 trillion industry, posing a big risk to the financial system". CNBC. Retrieved 2020-07-07.
  27. ^ "Alternative Lenders Exposed to Hotels Amid Coronavirus - The Real Deal". The Real Deal New York. 2020-03-20. Retrieved 2020-07-07.
  28. ^ "Asset managers should not be labeled 'shadow banks': Treasury". American Banker. 2017-10-27. Retrieved 2020-07-07.
  29. ^ Clark, Patrick (2019-11-21). "Blackstone Exits Single-Family Rental Bet Slammed by Warren". www.bloomberg.com. Retrieved 2020-07-07.
  30. ^ Dezember, Ryan (2016-12-06). "Wall Street as Landlord: Blackstone Going Public with a $10 Billion Bet on Foreclosed Homes". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-07-07.
  31. ^ Semuels, Story by Alana. "When Wall Street Is Your Landlord". The Atlantic. ISSN 1072-7825. Retrieved 2020-07-07.
  32. ^ Buttler, Morten (2019-10-29). "Denmark to Change Law to Stop Blackstone Rent Hikes". www.bloomberg.com. Retrieved 2020-07-07.
  33. ^ Egkolfopoulou, Misyrlena; Perlberg, Heather. "Warren CAlls Out Blackstone for "Shameless" Profies From Housing". www.bloomberg.com. Retrieved 2020-07-07.
  34. ^ Dezember, Ryan (2019-11-21). "Blackstone Moves Out of Rental-Home Wager With a Big Gain". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-07-07.
  35. ^ United Nations Working Group on the issue of human rights and transnational corporations (22 March 2019). "Mandates of the Working Group on the issue of human rights and transnational corporations and other business enterprises and the Special Rapporteur on adequate housing as a component of the right to an adequate standard of living, and on the right to non-discrimination in this context" (PDF).{{cite web}}: CS1 maint: url-status (link)
  36. ^ NW, The Center for Responsive Politics 1300 L. St; Washington, Suite 200; info, DC 20005 telelphone857-0044. "Real Estate Roundtable Lobbying Profile". OpenSecrets. Retrieved 2020-07-07.{{cite web}}: CS1 maint: numeric names: authors list (link)
  37. ^ Mittleman, Melissa (2018-02-13). "Blackstone's Homegrown Dealmaker Finally Makes It to the Top". www.bloomberg.com. Retrieved 2020-07-07.
  38. ^ Hui-yong Yu (2016-11-20). "Trump Said to Discuss Treasury Post With Blackstone's Gray". www.bloomberg.com. Retrieved 2020-07-07.
  39. ^ Grim, Ryan (2019-08-27). "A Top Financier of Trump and McConnell Is a Driving Force Behind Amazon Deforestation". The Intercept. Retrieved 2020-07-07.
  40. ^ Vardi, Nathan. "How 2019 Became The Best Year In Private Equity's History". Forbes. Retrieved 2020-07-07.
  41. ^ "Gray Foundation". www.grayfoundation.org. Retrieved 8 February 2018.
  42. ^ "Board". Harlem Village Academies. Retrieved 2016-12-27.
  43. ^ "Basser Center for BRCA – Abramson Cancer Center". Penncancer.org. Retrieved 2016-12-27.
  44. ^ a b "Blackstone's Gray Becomes Billionaire Amid Property Wager". Bloomberg. Retrieved 2016-12-27.
  45. ^ "The 2013 Basser Global Prize - Bassser Research Center for BRCA -Penn Medicine". 4 June 2013. Archived from the original on 4 June 2013. Retrieved 8 February 2018.
  46. ^ "Penn Medicine's Basser Research Center for BRCA Announces Additional $5 Million Gift from Mindy and Jon Gray to Fund External Research Grant Program". January 13, 2014. Retrieved 23 January 2014.
  47. ^ Menza, Kaitlin (2016-05-11). "The T&C 50: The Top Philanthropists of 2016". Townandcountrymag.com. Retrieved 2016-12-27.
  48. ^ "New York Seeks to Jump-Start College Savings by Giving Cash to Kindergartners' Parents". The New York Times. Retrieved 2016-12-27.
  49. ^ "Blackstone's Gray Gives $21 Million to Hit Cancer Close to Home". Bloomberg.com. 2017-05-04. Retrieved 2018-02-06.
  50. ^ "WEDDINGS - Mindy Basser, Jonathan D. Gray". The New York Times. 1995-07-02. Retrieved 2016-12-27.
  51. ^ "The 2016 New Establishment List". Vanity Fair. Retrieved 2016-12-27.

External links

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