Record growth at Blackstone sees assets jump 21% in 2019

The world’s largest alternative investment firm, Blackstone, grew in all of its business lines last year, bringing assets to a record $571 billion.

“We continued to expand out leading investment platforms into new areas, driving $134 billion of capital inflows during the year, and enabling us to deploy $63 billion – both records for the firm,” said Stephen A. Schwarzman, chairman and chief executive officer at Blackstone.

The firm ended 2019 with 21% year-over-year growth, including $104 billion of perpetual capital. Schwarzman said that the outlook has never been stronger at the firm with Blackstone being positioned as the “clear reference institution” in the fast-growing alternatives sector.

Blackstone also declared a quarterly dividend of $0.61 per common share to shareholders that will be paid out on February 18.

The top performing asset class for the firm was opportunistic real estate, which saw gross returns of 17.9% last year. Private equity wasn’t far behind with gains of 17% within its strategic partners unit and also saw the biggest influx of fresh capital, which totaled $57 billion over the courses of the year and remains the largest segment of Blackstone’s business with $183 billion in assets at year end.

Meanwhile, distressed credit logged losses of 4.4% and fund of hedge fund performance at Blackstone Alternative Asset Management (BAAM) returned only 8.2% gross in 2019.

Blackstone reported in its fourth quarter earnings statement that firmwide it has a whopping $151 billion in dry powder at the ready. Much of the capital resides within private equity where there is $74 billion in dry powder.

Blackstone’s private equity business saw its assets jump 40% in 2019 to a record $183 billion with inflows of $57 billion for the year. Fourth quarter inflows were driven by the firm’s latest life sciences fund that attracted $3.2 billion.

Real estate, by comparison, saw a 20% increase in assets with inflows of $34 billion for the year pushing overall assets under management to $163 billion. In the fourth quarter the largest inflows were into BREIT ($2.8 billion) and in the firm’s fourth real estate debt fund ($1.8 billion). Capital deployment was sizable too and included last quarter’s acquisition of a last-mile U.S. logistics portfolio in BREP and the Bellagio Las Vegas in BREIT.

Credit assets grew too at Blackstone to a record $144 billion with $31 billion in inflows for the year. The U.S. direct lending strategy had the most traction with $6.2 billion in fresh capital in 2019.

The picture at the firm’s hedge fund solutions unit was strong, but not in relation to the rest of Blackstone’s units. Assets rose 4% to $80.7 billion and firmly cementing the firm as the world’s largest investor in hedge funds. Inflows totaled $12 billion for the year with a second G stakes fund closing in the second quarter with $2.4 billion in capital.

Officials added that January 1 subscriptions of $631 million were not yet reflected in BAAM’s total assets under management.

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