Success is sweet and the princes of the private equity (PE) world are savouring their moment in the sun. Take Stephen Schwarzman, who runs Blackstone, one of the world’s most powerful funds. The iconic money manager celebrated his 60th birthday this February with a bash where guests like billionaire Donald Trump and New York mayor Michael Bloomberg were entertained by performers such as Rod Stewart and Patti Labelle. Schwarzman, who uses a helicopter to commute between his office and his 34-room Manhattan apartment, had good reason to let his party planners go wild. Last month, Blackstone’s initial public offering raised $4.13 billion (Rs 16,933 crore), catapulting Schwarzman’s personal wealth to $8 billion (Rs 32,800 crore).

The pizzazz of the PE world has captivated the world of business and glamour set alike. Reams of newsprint are now dedicated to the gigantic deals these new cowboys of capitalism are striking, and to the larger-than-life personas of the plucky and lucky people who control these huge money machines. This industry, which was sized at about $10 billion in 1991, now accounts for 35 per cent of the $1 trillion of total mergers in the US for the first half of this year, according to Dealogic, a deal tracker. Spicing things up is also the personal rivalry between PE moguls. For example, Henry Kravis of Kravis Kohlberg and Roberts, the original buy-out king who completed an audacious take-over of RJR Nabisco almost 20 years ago (and was immortalised in the cult business thriller, Barbarians At The Gate), is also set to go public and battle Schwarzman for the title “Undisputed Buy-out King”.

But how long will the party really last? Many analysts are already predicting that Schwarzman’s 61st birthday party could be a more sober affair. Part of the reason is that the desire of the private equity industry to expand is making funds take sharper and greater risks. Many are now also expanding to China and India.