By Preeti Singh and Dawn Lim If there was any doubt that Jon Gray is now the center of gravity at Blackstone Inc., the past few weeks have erased it. Joe Baratta, the firm’s private equity leader and only executive to sit on the board besides Gray and Steve Schwarzman, is leaving the company by year’s end. Earlier this month, head of real estate Nadeem Meghji resigned.

The two men have led units overseeing almost 60% of the firm’s $1.3 trillion of assets. But Blackstone isn’t replacing either with another executive wielding the same authority. Instead, their responsibilities are being spread among a wider group of chiefs, accelerating a shift away from an era when a few dealmaking personalities built investing empires and amassed enormous influence within the company.

The two men have led units overseeing almost 60% of the firm’s $1.3 trillion of assets. But Blackstone isn’t replacing either with another executive wielding the same authority. Instead, their responsibilities are being spread among a wider group of chiefs, accelerating a shift away from an era when a few dealmaking personalities built investing empires and amassed enormous influence within the company.

The changes at the world’s biggest alternative-asset firm — which follow the departure of multiple other top executives in recent years — reflect Blackstone’s shift from a buyout firm dominated by a handful of star investors into a sprawling institution that aims to be a financial superstore for everyday investors. Gray, the firm’s president and heir apparent to 79-year-old Schwarzman as chief executive officer, is leading the charge.

Few executives better embodied the old Blackstone model than Baratta, a billionaire known for his meticulousness and pushing his buyout teams hard. A 28-year veteran of the firm, he plans to retire at year end, Schwarzman and Gray said in a memo to employees Friday. They lauded the massive expansion he oversaw in his tenure — and said that no single executive will come in with the same oversight across private equity.

“Joe has spent years empowering a team of experienced investors to oversee our individual private equity strategies and funds,” the leaders wrote. “Given the strength of the leaders for each of our dedicated PE verticals today, we do not intend to replace Joe’s role.” The timing came as a surprise, but it signals a shift that’s been underway for years. Blackstone, founded in 1985 by a duo of entrepreneurs with $400,000, is now a trillion-dollar asset manager and an S&P 500 company with a roughly $147 billion market capitalization. And as Gray, 56, leads a push further into retail markets in search of the growth that shareholders demand, its culture is transforming, too.

Baratta’s planned exit caps 12 months that also saw real estate co-head Kathleen McCarthy depart, as well as the leader of Blackstone’s growth capital bets. Longtime executives and business builders David Blitzer and Dwight Scott have also stepped away in the past couple years. Baratta was one of the last executives left at the company who was Gray’s contemporary and occasionally challenged his ideas, according to people close to the firm.

Baratta’s planned exit caps 12 months that also saw real estate co-head Kathleen McCarthy depart, as well as the leader of Blackstone’s growth capital bets. Longtime executives and business builders David Blitzer and Dwight Scott have also stepped away in the past couple years. Baratta was one of the last executives left at the company who was Gray’s contemporary and occasionally challenged his ideas, according to people close to the firm.

Baratta’s run at Blackstone spanned eras. When the Sacramento, California, native joined the firm in 1998, it had only one private equity strategy and had just closed its third flagship buyout fund. The company made a name for itself in private equity’s heady boom, where a crop of firms competed to take companies private, larded them up with debt and sold them at big profits. A clutch of rainmakers parlayed profits into influence at Blackstone and created personal wealth through carried interest, their share of profits.

Blitzer, who joined the firm in 1991, built Tactical Opportunities, which invested across strategies that didn’t fit neatly within debt or equity. The namesake founders of what used to be Blackstone’s GSO unit made waves in the distressed debt world. Gray built the real estate division into a global powerhouse before he was elevated to chief operating officer and president in 2018.

Blitzer, who joined the firm in 1991, built Tactical Opportunities, which invested across strategies that didn’t fit neatly within debt or equity. The namesake founders of what used to be Blackstone’s GSO unit made waves in the distressed debt world. Gray built the real estate division into a global powerhouse before he was elevated to chief operating officer and president in 2018.

Over the past decade, the firm pushed far beyond buyouts, expanding in private credit and secondaries, infrastructure and hedge funds across geographies.

Blitzer scaled back his role in 2024, in what marked the departure of one of Blackstone’s biggest investing personalities. Last year, Baratta moved into a broader role as global head of private equity strategies, which required all fund heads in that category to report to him. Some saw the additional layer of management as part of the firm’s growth from a buyout firm into a modern asset manager. At the time, many insiders surmised that the move away from day-to-day fund management would pave the way for his departure.

Last year, Baratta moved into a broader role as global head of private equity strategies, which required all fund heads in that category to report to him. Some saw the additional layer of management as part of the firm’s growth from a buyout firm into a modern asset manager. At the time, many insiders surmised that the move away from day-to-day fund management would pave the way for his departure.

The billionaire, who is a minority owner of the NFL’s Las Vegas Raiders, had never given up hopes to run for public office one day or play a bigger role in his home state of California, people close to him say.

Traditional buyout firms have been facing a much tougher time than when Baratta first joined the firm. The industry is grappling with the backlog of unsold assets as dealmakers struggled to cash out of bets they made at lofty prices when interest rates were lower. The same drag from higher interest rates is weighing on the firm’s real estate arm, once Blackstone’s biggest unit. Under Gray, the division seized on discounted property after the 2008 financial crisis to become one of the world’s dominant investors. It went on to transform the industry with Blackstone Real Estate Income Trust, the private vehicle that gave wealthy individuals new access to property bets.

The same drag from higher interest rates is weighing on the firm’s real estate arm, once Blackstone’s biggest unit. Under Gray, the division seized on discounted property after the 2008 financial crisis to become one of the world’s dominant investors. It went on to transform the industry with Blackstone Real Estate Income Trust, the private vehicle that gave wealthy individuals new access to property bets.

When the Federal Reserve cranked up rates starting in 2022, returns at BREIT and other key funds slumped. While property valuations have started to recover, the central bank’s recent rate hike, along with soaring bond yields, means that borrowing costs are likely to stay elevated. The challenges have tested the $300 billion-plus division’s co-head structure, where Meghji and McCarthy shared responsibilities. McCarthy left late last year, leaving Meghji as sole leader.

But he abruptly announced plans to leave a few weeks ago, telling some associates he wanted to do something more entrepreneurial. Blackstone leadership told staff and investors that he decided to spend more time with family. A pair of co-heads were appointed to lead real estate. The brief experiment in putting one leader atop the firm’s marquee property business is likely to cement top leaders’ resolve to keep using co-heads, executives say. It’s a structure that banks like Goldman Sachs Group Inc. are known for, limiting any “key man” risk.

Private equity is moving even further in that direction. With Baratta’s departure, the business will have a bench of Blackstone veterans, albeit with narrower responsibilities. Among them is Martin Brand, the head of core private equity and the flagship funds; Jas Khaira, who leads the investing platform Blackstone N1; Viral Patel, head of retail fund Blackstone Private Equity Strategies; and Chris James, who oversees TacOpps.

The expanding roster of leaders presiding over specialized lanes has only made Gray’s position atop the firm more pronounced. Just before news of Baratta’s departure spread on Friday, Gray posted a social-media video of himself jogging, part of a series that have become something of a trademark for the executive. As he ran along a canal in Leeds, he reflected on how the English city evolved from an industrial powerhouse to a center for universities and financial services.

“These places evolve, but in many ways they’re timeless,” he said.