Building Blackstone, Backing Costco, and Working with Munger | Tony James on The a16z Show

Watch on YouTube ↗  |  May 05, 2026 at 14:30  |  1:23:23  |  a16z
Speakers
Tony James — Former President and COO, Blackstone

Summary

Tony James, former President and COO of Blackstone, joins David Haber for a career-spanning interview covering DLJ’s merchant-bank model, the Costco Series A, lessons from Charlie Munger, and the building of Blackstone. James explains Blackstone’s culture, investment committee process, retail distribution and insurance expansion, IPO, acquisitions, and succession planning. He closes with views on private markets, private credit, mid-market private-equity secondaries, late-stage private companies, life sciences, and newspapers.

  • James recounts building DLJ’s principal-investing and high-yield bridge-financing franchise.
  • He describes the Costco Series A, Jim Sinegal’s management, and Charlie Munger’s influence.
  • He explains how Blackstone changed culture, added processes, and scaled AUM and market value.
  • Blackstone’s retail distribution, insurance solutions, and acquisition strategy are framed as durable moats.
  • The IPO required complex accounting, compensation, and internal secrecy decisions.
  • James emphasizes succession planning and moving on before momentum fades.
  • He remains constructive on private markets but expects a private-credit correction before attractive private-debt opportunities.
  • He sees opportunities in mid-market PE continuation vehicles/co-investments, late-stage private companies, and life sciences.
Ideas
Tony James Former President and COO, Blackstone 15:33
Best-in-class retailer with durable customer model.
Tony James led the Series A into Costco and remained on the board for 38 years. He saw a proven warehouse-club model from Price Club, powerful unit economics, an affluent Pacific Northwest market, and exceptional management. Jim Sinegal was obsessed with execution details, customer value, and never compromising for short-term expediency, while Jeff Brotman knew the local real estate market. Costco’s culture of taking care of customers, steadily driving prices down, and building for the long term created a durable franchise and one of the all-time great venture investments.
COST HIGH
Tony James Former President and COO, Blackstone 24:18
Newspapers are depleting to zero.
Relaying and endorsing Charlie Munger’s view, James says the newspaper business is not a business but an oil well depleting to zero. Munger considered the Wall Street Journal an exception because it is a trade journal rather than a newspaper, but the newspaper sector broadly is structurally impaired.
Newspapers MED
Tony James Former President and COO, Blackstone 47:57
Unique retail distribution moat and scale.
James argues Blackstone built a durable competitive moat through culture, disciplined acquisitions, insurance solutions, and especially retail distribution. Institutional investors allocate much more to alternatives than retail and insurance clients, leaving a large runway. Blackstone’s breadth of products, brand, proprietary data, 500-person retail distribution team, and permanent capital make it a dominant strategic asset that he says competitors cannot easily replicate.
BX HIGH
Tony James Former President and COO, Blackstone 70:25
Private markets can outperform public markets.
James still believes private markets over time can significantly outperform public markets. Many investors keep the vast bulk of assets in liquid stocks and bonds they do not need to trade, creating opportunity cost and tempting them to act at the wrong time. Private capital can capture long-duration, less liquid opportunities if underwritten well.
Private markets HIGH
Tony James Former President and COO, Blackstone 71:02
Correction then buy private debt.
Private credit became crowded as capital flooded in: yields fell from 12% to mid-to-high single digits for the same risk, covenants weakened, and retail money forced immediate deployment. James expects a correction, though not a systemic 2008-style event because leverage is lower and banks do not own the exposure at 30-to-1. After the shakeout, he expects an opportunity to buy private debt at higher returns than publicly traded high-yield debt.
Private debt MED
Tony James Former President and COO, Blackstone 72:31
Buy mid-market PE co-investments.
About 30,000 mid-market private-equity portfolio companies cannot be sold, taken public, or sold to strategics, representing roughly $20 trillion of value that eventually must be sold. James sees this as an immensely attractive opportunity to buy seasoned assets company-by-company through co-investments or continuation vehicles at attractive prices, lower fees, with sponsors doubling down and better ability to analyze the assets. He says it is one of the great times to put money to work.
Continuation vehicles Co-investments HIGH
Tony James Former President and COO, Blackstone 73:45
Companies staying private longer, ride winners.
Venture and private-company markets have scaled far beyond old fund sizes, and companies are staying private longer. James likes the opportunity to hold and ride those companies longer if an investor is skilled enough at picking winners.
Late-stage private companies MED
Tony James Former President and COO, Blackstone 75:03
Life sciences will create huge fortunes.
Life sciences is another area with explosive upside and potential for huge fortunes, though holds are longer and harder than the rest of venture because of biological, clinical, and regulatory risk.
Life Sciences MED
Up Next
2:38
ISM Services Prices Paid Unchanged as US Job Openings Fall Slightly
Bloomberg Markets · May 05
2:16
US Trade Deficit Widens in March to $60.3 Billion
Bloomberg Markets · May 05
5:18
Duke Energy Beats on Profits and Revenue, But Is Not Raising Guidance
Bloomberg Markets · May 05
31:27
If You Code With AI, You Need to Use OpenAI Codex
Bankless · May 05
59:50
Explaining Korean Stocks and the AI Memory Trade - Rekt Mando
Thread Guy · May 05

This a16z video, published May 05, 2026, features Tony James discussing COST, Newspapers, BX, Private markets, Private debt, Continuation vehicles, Co-investments, Late-stage private companies, Life Sciences. 8 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Tony James  · Tickers: COST, Newspapers, BX, Private markets, Private debt, Continuation vehicles, Co-investments, Late-stage private companies, Life Sciences