Chairman and CEO, Blackstone Group
Private equity used to be viewed as unseemly, reserved for louche Gordon Gekko wannabes. No longer. The king of the hill is Schwarzman, who waltzes in rarefied society circles as easily as boardrooms. (Schwarzman holds the most-vaunted of society thrones, chairmanship of the Kennedy Center.) Private equity rivals the hedge fund as the hottest kind of shop on Wall Street, but Schwarzman is ahead of the curve; Blackstone is rivaled only by Washington, D.C.’s Carlyle Group as the most successfully institutionalized private-equity firm. Like any superstar, Schwarzman has spawned scores of copycats, who’ve driven up prices and made good deals scarce. Still, despite the glut, Schwarzman was able to raise a $12.5 billion fund last year.
CEO and senior managing director, Cerberus Capital Management
Named after the three-headed dog that guards the entrance to Hades, Cerberus once suffered a reputation as Wall Street’s scrappy pit bull, investing in ailing companies no one else wanted. But the secretive Feinberg has refashioned Cerberus, founded with a paltry $10 million in 1992, into a gargantuan, do-it-all firm that controls companies with total sales topping McDonald’s and Coca-Cola’s. Cerberus recently bested legendary private-equity firm KKR to buy out GMAC, General Motors’s lending arm, and snatched up iconic brands such as the Albertsons grocery chain, Burger King and Alamo Rent A Car. Cerberus embodies the rise of a new, widely imitated business model, in which the old demarcation lines of hedge fund, LBO firm, or private equity don’t apply anymore. Though his image may have softened, Feinberg is still biting.
David E. Shaw
Chairman, D.E. Shaw & Co.
The Bill Gates of computer finance. Wall Street’s resident math guru runs one of the world’s largest hedge funds, with $20 billion under management. A former computer-science professor at Columbia, Shaw is a pioneer in quantitative investing, which relies on sophisticated computerized algorithms to profit from inefficiencies in the market. Famed for its exclusive hiring process, D.E. Shaw reportedly extends an offer to only one in 500 applicants. (Amazon.com founder Jeff Bezos is an alum.) An estimated 16 percent of hedge-fund assets are managed by “quants” like Shaw. Among his most serious disciples (and competition): Jim Simons of Renaissance Technologies and Ken Griffin of Citadel Investment Group.
Chief investment strategist, Pequot Capital Management
Though fortune-telling is de rigueur on Wall Street, Wien’s predictions are anticipated with the sweaty angst reserved for interest-rate hikes. The former strategist at Morgan Stanley, who recently made the common Wall Street semi-retirement move of joining a private-equity firm, has been publishing his annual list of “Ten Surprises” since 1986; he hosts annual summer lunches at his Wainscott home, where finance titans like George Soros and Steve Schwarzman don futurist hats themselves.
Chief investment officer, Yale University
The intellectual godfather of the hedge-fund era. Swensen, superstar manager of Yale’s $15.2 billion endowment (average annual return: 16 percent), was an early advocate of hedge-fund investing, which spurred traditionally conservative pension-fund and endowment managers to follow suit; their money has been the fuel of the hedge-fund boom—and they’re expected to pour $300 billion more into hedge funds within two years. His 2000 book, Pioneering Portfolio Management, is revered; last year’s Unconventional Success, which came out blisteringly against mutual funds, is gaining a similar reputation among individual investors. Swensen has created a generation of fund managers. When managers set up their own fund, they look for an investment from Swensen; it’s the Good Housekeeping seal of approval. Incredibly, Swensen earns just $1 million a year at Yale, though his Connecticut compadres easily command 50 times that.
Comptroller, New York State
Hevesi administers the second-largest pension fund in the country, with a whopping $140 billion in assets earmarked to pay retirement benefits for 968,000 current and former civil workers. Hevesi ended the year up 8.5 percent, beating the S&P 500 and his own benchmarks. Sweet vindication for the countless, some say gratuitous, street fights he’s picked with everyone from Governor Pataki, over the state budget, to WorldCom, which won Hevesi a $6 billion settlement.
Co-host, CNBC’s Squawk Box
What’s the breakfast of champions on Wall Street? Coffee, bagel, and Squawk Box, co-hosted by Faber, dubbed “the Brain” by fans. CNBC is a trading floor’s wallpaper, and Faber’s stature allows him to debunk Internet rumors in real time; he’s a lifesaver for corporate flacks. Though market data abounds online, and real scoops have proved elusive, Faber remains the man investors can’t afford to miss.
“Inside Wall Street” columnist, BusinessWeek
Main Street’s most-followed stock picker. Though mocked and dismissed by Wall Street professionals, Marcial, who has written the weekly “Inside Wall Street” column since 1981, buoys a stock with a mere mention in his column, often for only the first day the magazine appears. But that’s long enough to send investors scrambling for advance peeks. Last month, two workers at BusinessWeek’s Hartford, Wisconsin, printing plant were charged with stealing magazines off the presses to get an early start on Marcial’s picks.
Director and chairman of the executive committee, Citigroup
A god. But in finance, Rubin, the former Goldman Sachs trader who was Bill Clinton’s Treasury secretary, is not influential at all: Citigroup, where he’s been since 1999, has been hobbled by regulators. Yet Rubin is bigger than the Street: For his role in handling the 1997–98 Asian financial crisis, he’s become the living embodiment of the Clintonian idea that capitalism—and specifically globalization—can serve a moral purpose. And he’s the living case for the argument that Democrats can manage national economic policy more prudently than the other party.