black stone Inc.
net profit nearly doubled in the fourth quarter on the back of strong investment performance in some of its largest businesses, as the largest private equity firm by assets picked up more cash than in any other period in its history story.
The New York-based company said its earnings rose to $1.40 billion, or $1.92 per share, from $748.9 million, or $1.07 per share, a year earlier.
Blackstone’s giant real estate business helped boost results. Its so-called opportunistic real estate investments rose 12%, outpacing the S&P 500’s 11% gain. 30% for the year.
The value of Blackstone’s private equity investments, by contrast, rose just 4.8% in the fourth quarter.
Products such as BREIT and its credit investment peer BCRED have helped Blackstone dramatically broaden the types of investors it serves in 2021, penetrating deeper into the ranks of a group known as the affluent mass. . These vehicles have also helped to strengthen the company’s “perpetual” capital, which generates regular and predictable costs because it does not have to be returned within a given period. Perpetual assets under management more than doubled year-over-year to $313.4 billion.
“What’s really happening is an expansion of who we serve and where we invest capital,” Blackstone chairman Jonathan Gray, who has made a name for himself as a real estate investor, told The Wall. StreetJournal.
Blackstone saw $154.8 billion in inflows in the quarter, a gain larger than rival TPG’s entire asset base Inc.,
which went public earlier this month. The total was not only higher than any previous quarter recorded for Blackstone, but also higher than any previous full year.
The main contributors were the conclusion of major agreements to manage the assets of American International Group Inc.
and Allstate Corp.
, which together added about $77 billion. Even excluding these, the quarter would have been a record high.
The influx of new capital pushed Blackstone’s assets under management to $880.9 billion at the end of the fourth quarter, from $730.7 billion in the third quarter and $618.6 billion in the fourth quarter of 2020. The company, which in 2018 set a goal of reaching $1 trillion in assets by 2026, looks set to hit that target much sooner than expected.
Earlier this month, Blackstone’s infrastructure business announced a $3 billion investment in Invenergy Renewables Holdings LLC, the largest privately held renewable energy company in North America. Blackstone’s real estate business also completed the privatization of two apartment companies, and its credit business made five loans of $1 billion or more.
Blackstone’s distributable income, or the portion of cash that can be returned to investors, climbed to $2.27 billion, or $1.71 per share, from $1.46 billion, or $1.13, a year earlier.
Fee-related revenue of $1.83 billion more than doubled in the fourth quarter of 2020.
Blackstone said it would pay a dividend of $1.45 per share, down from 96 cents.
Write to Miriam Gottfried at [email protected]
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