Stephen Schwarzman & Ellen Philips — Blackstone's Quiet Split
He divorced five years after founding Blackstone — decades before it became a $1 trillion asset manager.
Key Facts
What Happened
Stephen Schwarzman married Ellen Philips in 1971, and together they had two children, Elizabeth and Edward. For over a decade, the couple navigated the high-pressure world of Wall Street as Schwarzman rose through the ranks at Lehman Brothers before co-founding the Blackstone Group with Peter Peterson in 1985.
By 1990, when the couple divorced, Blackstone was still a modest private equity firm managing a few billion dollars — a far cry from the global titan it would become. The settlement terms were never made public, but the timing is significant: Schwarzman's stake in Blackstone at the time was worth a fraction of what it would eventually become when the firm went public in 2007 at a $33 billion valuation.
Schwarzman remarried in 1995 to Christine Hearst, an intellectual property lawyer and former wife of a Hearst family heir. His fortune continued to grow exponentially — by 2025, his net worth exceeded $40 billion, making the 1990 divorce settlement one of the most consequentially timed splits in financial history.
The Schwarzman divorce illustrates a fundamental challenge in business divorces: valuing an illiquid, early-stage company. At the time of the divorce, no one could have predicted Blackstone's trajectory. Ellen Philips's settlement — whatever it was — was based on 1990 valuations of a five-year-old firm. The massive appreciation that followed went entirely to Schwarzman and his new family.
Legal Breakdown: How early-stage company ownership gets divided when a marriage ends before the company's massive success
Valuing Early-Stage Companies in Divorce
At the time of the Schwarzman divorce, Blackstone was worth a tiny fraction of its future value. Courts and appraisers can only value a company at its current fair market value — they cannot account for future success. This creates a timing risk for the divorcing spouse.
Illiquid Assets and Equitable Division
Private equity firm stakes are inherently illiquid. In 1990, there was no public market for Blackstone shares. The settlement likely involved a negotiated buyout of Ellen's community property interest, based on book value or a discounted cash flow analysis.
Post-Divorce Appreciation
Any increase in value after the divorce is finalized belongs to the owner-spouse. This is one of the starkest examples: a settlement based on 1990 valuations versus a firm that eventually managed over $1 trillion in assets.
What This Means for Your Divorce
- →The timing of a divorce relative to a company's growth trajectory can mean the difference between millions and billions.
- →Early-stage business valuations during divorce rarely capture future potential — negotiate for contingent payments or equity stakes if possible.
- →If you are divorcing a founder of a growing company, hire an independent business valuator who understands the industry's potential.
- →Post-divorce appreciation of business assets belongs to the owner — making the divorce date one of the most consequential dates in financial planning.
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This article is based on publicly available court records, news reports, and legal analysis. It is provided for educational purposes only and does not constitute legal advice. No attorney-client relationship is created by reading this content.
Divorce laws vary by jurisdiction. Always consult a licensed attorney in your area before making legal decisions.