Real estate and credit fuel Blackstone growth as Schwarzman hails “powerful platform expansion”
Rapid growth in its private credit and insurance business, and high returns from its real estate investment portfolio, are among the key drivers behind another quarter of impressive growth and expansion at Blackstone Group.
Detailing its first-quarter earnings, the world’s largest alternative asset manager said the group had seen year-on-year growth of 55 per cent in fee-related earnings, 63 per cent year-on-year growth in distributable earnings, and 84 per cent year-on-year growth in net accrued performance revenues.
Inflows of just under USD50 billion in the first three months of the year took the firm’s total assets under management to USD915.5 billion at the end of March – a rise of 41 per cent over the last 12 months, and within 10 per cent of its previously announced target of hitting AUM of USD1 trillion by 2026.
Credit and insurance strategies led the way in terms of inflows, both in Q1 and over the past 12 months – accounting for USD19.5 billion in the first quarter, and for USD136 billion over the past year (representing nearly half of Blackstone’s total groupwide investor inflows of USD288.7 billion during the 12-month period).
But the firm also saw strong first-quarter inflows into real estate (USD17 billion), private equity (USD9 billion) and hedge fund solutions (USD4 billion) as the group continued to deliver strong momentum across its expanding platform of alternative asset management strategies.
In terms of investment performance, real estate was the star in the first quarter – with Q1 gains of over 10 per cent for the firm’s Opportunistic Real Estate strategies (taking the 12-month return to 47.6 per cent) and almost 8 per cent for its Core+ strategies (for a 12-month gain of over 30 per cent).
In private equity, a first-quarter gain of 2.8 per cent in Corporate Private Equity took the 12-month rolling return to 30 per cent, while Tactical Opportunities rose 1.8 per cent for a 12-month return of 22 per cent, and Secondaries gained 8.5 per cent to record a 12-month return of 41 per cent.
The hedge fund solutions business also delivered a robust performance in the difficult market conditions of the past few months – gaining 1.2 per cent in the first quarter for a 12-month rolling return of 6.9 per cent that compares favourably with a 0.9 per cent return for the HFRX Global Hedge Fund Index.
Stephen Schwarzman, Blackstone’s chairman and chief executive officer, said the first quarter performance “represented one of the best in Blackstone’s 36-year history despite an extremely challenging market backdrop”.
He added: “Our flagship strategies delivered significant outperformance for investors while our powerful platform expansion continued with USD50 billion of inflows in the quarter. This translated once again to exceptional financial results for our shareholders.”