World’s largest alternative assets management firm Blackstone’s economic net income (ENI) almost doubled in the first quarter ended on March 31, 2015 to $1.62 billion, up from $814 million in the year-ago period, on the back of strong asset sales generated by its private equity and real estate units.
The company beat analysts’ earnings estimates by a wide margin too.
Total revenue of Blackstone for the quarter also increased 66 per cent to $2.5 billion.
Distributable earnings surged in the first quarter to a record $1.2 billion, on $13.5 billion of realisations, from $479 million on $9.3 billion of realisations in the same period last year.
GAAP net income for the quarter was reported at $629 million, 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 $310 billion, up 14 per cent year over year, despite returning $62.5 billion of capital to investors during the year. Fee-earning AUM hit a record $223.5 billion, up 10 per cent over the year ago period as $56 billion of gross inflows outpaced $34.4 billion of realisations and outflows, it said in the release.
Undrawn capital or total dry powder rose 34 per cent to $64.5 billion at the end of the quarter.
Meanwhile, Blackstone declared a quarterly distribution of 89 cents per common unit, the largest dividend payment in its history.
“Our limited partners entrusted us with $30 billion of new capital in the quarter and $77 billion over the last 12 months, shattering our own record for the alternative asset management industry,” Stephen A Schwarzman, chairman and CEO of the New York-based company said.
Besides its core PE and realty assets, Blackstone also has hedge fund and credit related assets.
Blackstone’s total revenues and economic income were $1.2 billion and $829 million, respectively, from the PE unit. The portfolio value appreciated 6.4 per cent during the quarter and 21.1 per cent over the last 12 months, on strong operating performance in BCP V (up 12 per cent and 34.2 per cent in the last year).
Private equity generated realisations of $3.3 billion during the quarter and $14 billion during last 12 months, driven by public and strategic exits in the corporate private equity funds. First quarter realisations included strategic sale of Freescale and the secondary sales of Pinnacle Foods, Catalent Inc, Michaels and Merlin.
The firm invested $2.5 billion of total capital during the quarter.
Overall AUM under PE was $76.3 billion. It also commenced fundraising for seventh global private equity fund. The first closing is expected in the second quarter of 2015.
Economic income almost doubled to $638 million, while total revenues grew 68 per cent to $915 million, helped by continued strong operating fundamentals across real estate asset classes.
The Opportunistic Real Estate Fund’s carrying value appreciated 8.2 per cent for the quarter and 24.4 per cent over the 12 months.
It raised $16.4 billion of new capital during the quarter, including $14.5 billion from the first and only institutional limited partner closing for the eighth global opportunistic real estate fund, and $1.6 billion in BPP funds. It invested $1.4 billion of total capital during the quarter. At the end of the quarter, an additional $3.9 billion of capital was committed but not yet deployed.
The company also announced acquisition of GE Capital real estate assets this week, which will result in an estimated $3 billion of capital invested across multiple vehicles, including inaugural investment of the eighth global opportunistic real estate fund.
The total AUM under the real estate vertical was $92.7 billion at the end of the quarter.
(Edited by Joby Puthuparampil Johnson)