Blackstone surpassed the $1 trillion assets under management mark in the second quarter, recording net income of $1.2 billion in quarterly results released today.
The rapid growth comes as no surprise, as Blackstone raised one of the largest alternative investment funds of the past year with $25 billion in investor commitments, according to the Alternatives Watch Research 2023 Manager Compendium.
“This milestone reflects the extraordinary trust we have developed with our investors — built through performance — as well as our distinctive position as an innovator,” said Chairman and CEO Stephen Schwarzman in a statement. “We believe we are in the early stages of the long-term growth of the alternatives industry, providing a vast opportunity for further expansion.”
In the second quarter, Blackstone reported over $30 billion in inflows and 6% year-over-year growth in assets with inflows of $158 billion over the preceding 12 months.
In terms of fundraising and performance, credit/insurance strategies stole the show with over $12 billion in inflows in the second quarter and investment returns of 3.3% for private credit. Inflows in the quarter included $5.7 billion for the global direct lending strategy with $1.8 billion of equity raised for BCRED. Over the last 12 months roughly $29 billion in credit assets have been deployed.
This growth likely carries over from the first quarter as most large private equity companies’ credit funds had led the Q1 performance figures as central bank interest rate increases challenges other private markets. The credit portfolios of the world’s five largest publicly traded alternative investment firms in the first quarter averaged gains of 3.66%, while private equity returns averaged 2.04%, according to data gathered by Alternatives Watch Research.
When it comes to performance, opportunistic real estate is still struggling with losses of 3% during the second quarter. The write downs on the portfolio meant that opportunistic funds were flat in the quarter and declined, while core plus funds appreciated 1.7% in the quarter and were up a meager 0.9% over the last year. Assets in real estate grew by 4% thanks to $7.9 billion in inflows and despite the negative headlines involving BREIT’s liquidity troubles surfacing in late 2022.
Private equity in the second quarter saw total assets bump up by 7% to $295 billion. Inflows in the quarter included $1.1 billion for the ninth flagship private equity fund, $1.6 billion for Tactical Opportunities vehicles, and $713 million for Blackstone Infrastructure Partners. Returns for corporate private equity were up 3.5% during the quarter and are up 9.7% over the previous year.
Lastly, hedge funds have yet to rise past previous asset records, totaling $78 billion. The fund of hedge fund group is still the world’s largest allocator to hedge funds, raising over $8 billion over the last 12 months alone. In June, the group bid farewell to Scott Bommer, who led its Horizon Fund, a strategic partnerships platform that is now led by Joe Dowling.
