World’s largest alternative assets management firm Blackstone continued to generate
double-digit growth in key earnings even though its economic net income (ENI) growth moderated in the third quarter ended September 30 after a record performance in Q2 when it had rocketed 89 per cent.
The firm’s ENI rose 18 per cent to $758 million for the quarter ended September 30, 2014 over the year-ago period, as Blackstone’s funds created $4.3 billion of value in the third quarter alone. Total revenue was up 35 per cent to $1.65 billion for the quarter.
Its flagship fund BCP V which was launched in 2006 crossed an 8 per cent returns hurdle and generated $147 million in performance fee during the third quarter with $766 million of realisations year to date.
Distributable earnings (DE) more than doubled in the quarter year over year on a record level of realisations, bringing the year-to-date total to $672 million.
GAAP net income was $251 million for the quarter, net of certain non-cash IPO and transaction-related expenses and exclusive of net income attributable to non-controlling interests, primarily inside ownership.
Its total assets under management (AUM) reached a record $284 billion, up 15 per cent year over year despite returning $53.2 billion of capital to investors over the last 12 months.
Performance fee eligible AUM reached $197.9 billion at the end of the quarter, up 20 per cent year-over-year.
Gross inflows were $13.1 billion for the quarter and $54.8 billion over the last 12 months on record organic inflows. Blackstone’s portfolio of funds and assets created $34.8 billion of value in the past one year.
Blackstone’s committed undrawn capital or dry powder stood at $42.3 billion, of which $17.7 billion was eligible but not currently earning management fees. This was lower than $45.3 billion as of June 30.
"With one of the largest pools of available dry powder capital and the broadest alternative investment platform, we are well positioned to capitalise on the dislocation in asset values created by greater market volatility," said Stephen A Schwarzman, chairman and CEO of Blackstone.
Blackstone’s portfolio company operating approach drove results to record levels and segment appreciation outperformed the broader equity markets with 3.7 per cent appreciation during the quarter and 28.2 per cent over the last 12 months.
Total revenues and ENI were $1.8 billion and $1.1 billion respectively year to date, which were more than double the prior year period on consistent fund appreciation.
Private equity generated realisations of $14.7 billion over the last 12 months on a steady rise in realisations through strategic sales, refinancings and public market exits.
The firm invested $3.2 billion of total capital during the quarter, taking the trailing 12-month figure to $8.9 billion. At quarter end, an additional $2.5 billion of capital was committed not yet deployed.
Strategic Partners’ sixth secondary fund of funds closed on $1.2 billion of total capital with a $4.4 billion target, nearly 2x larger than its predecessor fund and closed on an infrastructure and real assets SMA of $400 million.
Overall AUM under PE was $69.9 billion.
Economic income rose 19 per cent to $493 million in the third quarter while total revenues increased by 20 per cent to $793 million.
The Opportunistic Real Estate Fund’s carrying value appreciated 6.2 per cent for the quarter and 28.1 per cent over the 12 months.
The firm had a $6.7 billion of proceeds during the quarter driven by partial realisations in the office portfolio and Brixmor; realisations reached $16 billion over the last 12 months.
It raised $1.6 billion of capital during the quarter including $209 million for the Asia fund, $402 million for Core+ and $430 million in debt strategies.
It invested $3.1 billion of total capital during the quarter, taking the trailing 12-month figure to $11.6 billion, bringing capital raised in last 12 months to $12.3 billion.
The total AUM under the real estate vertical was $80.18 billion at the end of the quarter.
(Edited by Joby Puthuparampil Johnson)