Blackstone assets up 25% amid strong earnings growth

Blackstone reported its best business results in the firm’s 36-year history, said Chairman and CEO Stephen Schwarzman in advance of the company’s third-quarter earnings call with investors.

The firm announced a quarterly dividend of $1.09 per share as net income was $9.4 billion so far in 2021.

“Earnings increased dramatically, and all of our key financial and capital metrics reached record or near-record levels,” said Schwarzman in a statement. “Most importantly we continue to deliver outstanding investment performance for our limited partners, with the third quarter capping our best twelve-month period for fund appreciation.”

He believes the $731 billion alternative investment giant is in the early stages of a long-term acceleration of the business. With inflows of $148 billion over the course of the past 12 months, the evidence of continued growth seems to be seen across private credit/insurance, real estate, private equity, hedge funds and the firm’s insurance business.

Private credit/insurance solutions saw the greatest inflows in the third quarter, with nearly $20 billion in fresh capital. BCRED raises $3.5 billion of equity capital during the quarter as a continuously offered non-trade BDC. BCRED also had Oct. 1 subscriptions of $1.1 billion not included in this figure. Blackstone’s latest mezzanine/opportunistic strategy had $1 billion of new capital in the quarter. Blackstone also closed three CLOs for $1.6 billion.

Real estate growth also remains strong with $16 billion in quarterly inflows. BREIT raised $7.9 billion during the quarter, and Blackstone said that another $2.2 billion in Oct. 1 subscriptions have yet to be included in AUM. But making headlines were the firm’s $4 billion fundraise in a third Asian opportunistic fund and the sale of the Cosmopolitan of Las Vegas for $5.65 billion, which was the real estate divisions most profitable single sale ever.

On the heels of Blackstone’s announced purchase of a majority purchase of SPANX, the firm’s private equity group saw its assets bump up to $231.5 billion with $7.4 billion in inflows for the third quarter. Leading the way were fundraises for the fourth Blackstone Tactical Opportunities fund and the second Corporate Private Equity Asia fund.

Meanwhile in the hedge fund group, total AUM is still flirting with record highs at $80.6 billion, with an additional $1.1 billion of October subscriptions not making it into the third quarter AUM figure.

When it comes to returns, Blackstone Alternative Asset Management (BAAM) is doing well with gains over the last 12 months of 12.2% net of fees, with less volatility than the broader markets.

Other Blackstone alternatives strategies had healthy returns as well.

Leading the way were private equity secondaries that were up 52.8% over the year ending Sept. 30, while corporate private equity and tactical opportunities strategies were up 49.1% and 35.2% gross.

Opportunistic real estate gained over 16% during the third quarter and was up 35.9% for the year gross of fees.

Lastly, the private credit portfolio at Blackstone was up 24.6% for the year gross of fees.

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