Blackstone’s net profit nearly doubled in the fourth quarter on strong investment performance in some of its biggest businesses, as the largest private equity firm by assets picked up more cash than in any other period in its history .
The New York-based company said 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 11% gain in the S&P 500. BREIT, the company’s non-traded real estate investment trust for individual investors, was also a major contributor, generating a net return by about 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,” said Blackstone chairman Jonathan Gray, who has made a name for himself as a real estate investor. The Wall Street Journal.
Blackstone brought in $154.8 billion in inflows during the quarter – a bigger haul than the entire asset base of rival TPG, 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 closings of major deals to manage the assets of American International Group and Allstate, 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 billion in assets by 2026, appears to be on track to achieve that goal much sooner than expected.
Earlier this month, Blackstone’s infrastructure business announced a $3 billion investment in Invenergy Renewables Holdings, 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 profits, or the portion of cash that could be returned to investors, climbed to $2.27 billion, or $1.71 per share, from $1.46 billion, or $1.13, one 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 Miriam.Gottfried@wsj.com
This article was published by Dow Jones Newswires