World’s largest alternative assets management firm Blackstone's economic net income (ENI) declined 6 per cent in the fourth quarter ended December 31, 2014 to $1.45 billion but beat market estimates of its earnings per share.
Total revenue of Blackstone for the quarter also dropped 21 per cent to $2.13 billion.
For the year ended on December 31, 2014 its ENI rose 24 per cent to $4.3 billion over the year ago period, as its funds appreciated $24.5 billion, outperforming the relevant market indices by a wide margin, according to a press release.
Revenue for the full year, however, grew 14 per cent to $7.53 billion.
Its flagship fund BCP V which was launched in 2006 generated $834 million in performance fee during the fourth quarter with $1.6 billion of realisations year to date.
Distributable earnings surged around 64 per cent in the year ended December 31, 2014 to a record $3.1 billion, over the year-ago period, on $44.6 billion of realisations from IPOs, secondary sales and distributions.
GAAP net income for the year rose 35 per cent to $1.6 billion, net of certain non-cash IPO and transaction related expenses and net income attributable to non-controlling interests, primarily inside ownership.
The company's total assets under management (AUM) reached a record $290 billion, up 9 per cent year over year, despite returning $56.8 billion of capital to investors during the year.
Capital raised totalled $19.1 billion for the fourth quarter and $56.9 billion for the year. Increased investment activity led to $8.1 billion of capital invested during the fourth quarter of 2014, bringing the full year total to $26.4 billion, up 73 per cent. Of the $26.4 billion, 47 per cent was deployed outside of North America and 48 per cent was deployed in products launched since the IPO, reflecting the firm’s geographic and product diversification.
Fee-earning AUM hit a record $216.7 billion, up 9 per cent over the last year as $49.9 billion of gross inflows outpaced $31.5 billion of realisations and outflows, it said in the release.
Besides its core PE and realty assets, Blackstone also has hedge fund and credit related assets.
Blackstone’s portfolio company operating approach drove results to record levels and segment appreciation outperformed the broader equity markets with 4.2 per cent appreciation during the quarter and 21.6 per cent over the last 12 months, on strong operating performance in BCP V (up 27.2 per cent) and continued positive performance of BCP VI (up 21.9 per cent).
Total revenues and economic income were $2.7 billion and $1.8 billion, respectively, for the full year.
Private equity generated realisations of $15.4 billion over the last 12 months and $4.2 billion during the quarter, driven by public and strategic exits in the corporate private equity funds. Fourth quarter realisations included the sale of United Biscuits and the secondary sales of Pinnacle, Hilton, Merlin, Nielsen and Kosmos.
The firm invested $3.6 billion of total capital during the quarter, taking the trailing 12-month figure to $11.2 billion. At quarter end, an additional $2.9 billion of capital was committed but not yet deployed.
Overall AUM under PE was $73 billion. It also commenced fundraising for seventh global private equity fund.
Economic income fell 38 per cent to $577 million in the fourth quarter, and 9 per cent to $1.88 billion in the entire year as compared to the year ago period. Total revenues for the segment also fell by 37 per cent to $865 million in the quarter and by 7 per cent to $2.98 billion for the entire year.
The Opportunistic Real Estate Fund’s carrying value appreciated 6.6 per cent for the quarter and 20.9 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 $9.6 billion of new capital during the year. It invested $3.6 billion of total capital during the quarter, taking the trailing 12-month figure to $11.5 billion. At quarter end, an additional $2.5 billion of capital was committed but not yet deployed.
The total AUM under the real estate vertical was $80.8 billion at the end of the quarter.
(Edited by Joby Puthuparampil Johnson)