Mr. Bo­tein once worked for Blackstone. Both firms eye the huge opportunity in serving individual investors who, in the U.S. alone, control some $14 trillion in retirement savings. In the past two years, Blackstone has launched two mutual funds, which invest in hedge funds and have collected $3 billion in assets. The firm is also offering private equity and real estate funds for wealthy retail investors and has created publicly traded credit funds. "You're seeing the traditional and alternative managers bump into each other," says Rob Lee, an analyst at Keefe, Bruyette & Woods who follows Blackstone and BlackRock. SHARED HISTORY Once upon a time, of course, Mr. Schwarzman and Mr. Fink and all of their employees were together in one office at 345 Park Ave. in New York. The shared history of Blackstone and BlackRock is the stuff of Wall Street legend. Mr. Schwarzman and Peter G. Peterson, former colleagues at Lehman Brothers, founded Blackstone in 1985, starting with just $400,000.