Blackstone sees $20bn in quarterly inflows as appetite for secondaries picks up

New York-based Blackstone reported $20 billion in investor inflows in the volatile second quarter of 2020, mainly driven by investor interest in private equity and secondary funds. As a result, the storied $564 billion alternative investment giant is sitting on $156 billion in dry powder as it seeks new opportunities in credit and private equity primarily. In the last 12 months, the firm has put more than $61 billion to work after having inflows of $94 billion for the year ending June 30. Approximately $13 billion was put to work in the second quarter alone. “It was a strong quarter for our firm despite the continued market volatility,” said Stephen A. Schwarzman, chairman and CEO at the firm. “Investment performance rebounded sharply, we continued to deploy capital in high conviction sectors and our limited partners entrusted us with another $20 billion of inflows across our expanding platform.” He added that the firm is ‘very well positioned’ to navigate the road ahead with a long-term committed capital. Blackstone’s $184 billion private equity unit right now is sitting on a record-breaking $76 billion in dry powder, which has grown over the last year. The second quarter saw a $2.8 billion close of the firm’s third infrastructure secondaries fund. Secondaries saw performance gains of over 20% for the year ending June 30. The other top performing private equity portfolio in the quarter was Tactical Opportunities, which was up 10.8% Credit strategies and insurance, meanwhile, saw inflows of nearly $7 billion in the second quarter with the launch of four CLOs in the U.S. and Europe totaling $1.7 billion. An additional CLO raised $400 million. Officials also reported a $795 million fundraise for the fourth mezzanine/opportunistic fund in the quarter and $450 million subsequent to quarter end as returns for the credit composite portfolio were up 10% for the quarter. Blackstone’s fund of hedge fund unit saw its assets swell past $75 billion and more enthusiastically officials announced the portfolio’s best performance in nearly two-decades with gross returns of 6% for the quarter. For the year-to-date through June, however, the portfolio remains down 3.5% net, which officials say is in line with the S&P 500 Total Return with less than one half the volatility. Real estate was sitting on a whopping $46 billion in dry powder at the end of the quarter, after having raised $2.1 billion BREDS IV and $945 million in BREIT. Notable acquisitions included a U.K. student housing portfolio, a Japanese residential portfolio and a minority stake in a public Australian casino operator. Overall, officials say the $167 billion portfolio has been insulated from sectors impacted by COVID-19.

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