Blackstone Founder to Give $100m to New York Libraries

Guarded by two stone lions nicknamed "patience" and "fortitude", the New York public library has been a beaux-arts landmark since 1911. It will shortly enter a new phase of its history renamed as the Stephen A Schwarzman building.

The founder of the Blackstone private equity empire today announced that he was donating $100m of his fortune to the New York library service – a gift greeted by mayor Michael Bloomberg as "incredible".

"It's the generosity of New Yorkers like Steve that really sets this city apart," said Bloomberg.

The money will be used for renovation and expansion of the city's libraries. But it comes at an awkward time for 61-year-old Schwarzman, who has seen his wealth slump along with Blackstone's stock.

When Blackstone became the first major private equity firm to go public in June, its shares were priced at $31. They have since halved, trading at $15.55 today, and the company suffered an 89% plunge in its fourth-quarter profits.

Forbes magazine calculates that Schwarzman's personal worth has declined from nearly $10bn to $6.5bn. Blackstone's difficulties center on problems in the credit market which have made it hard to arrange the leveraged debt buyouts on which the firm built its success.

Blackstone's assets include United Biscuits, Madame Tussauds and Cafe Rouge plus vast American enterprises such as Equity Office Properties and Hilton Hotels.

But since the start of 2008, Blackstone has only announced two purchases – a hedge fund manager, GSO Capital, and a catering firm, Performance Foods.

Bank of America remains positive, rating the stock as a "buy" citing solid growth in the value of Blackstone's assets.

But Schwarzman is facing scrutiny over his empire's debt financing and was forced to bat down speculation of asset sales this week: "There is no conceivable run on the bank. We are never forced to sell any assets at the wrong time. We'd buy companies with the intent of holding them for an average of five years."