Blackstone's AUM reaches another record, up 9% in 2016

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Blackstone Group's assets under management grew to a record $366.6 billion as of Dec. 31, up 2% from three months earlier and up 9% from a year earlier, according to Blackstone's earnings report released Thursday.

The alternative investment firm credited strong fundraising, with gross inflows of $16.7 billion in the fourth quarter and $69.7 billion in all of 2016. Blackstone invested $8 billion in the fourth quarter and $23.1 billion for all of 2016, and distributed $57.7 billion to investors in the year ended Dec. 31.

Blackstone's largest segment for the second consecutive quarter was real estate with assets under management of $102 billion, flat from the end of the previous quarter and up 9% from the end of the year-earlier quarter. Real estate had also been Blackstone's largest segment in 2014, surpassing private equity, hedge funds and credit.

Private equity assets under management were $100.2 billion as of Dec. 31, up 1% from three months earlier and up 6% from a year earlier. Blackstone's credit business had $93.3 billion in AUM, up 4% from Sept. 30 and up 18% from Dec. 31, 2015. Blackstone's hedge fund business had $71.1 billion in assets under management, up 1% from three months earlier and up 3% from a year earlier.

Dry powder was $101.3 billion, down 1% from Sept. 30 but up 27% from Dec. 31, 2015. Some 77% of Blackstone's dry powder was raised in 2015 and 2016. The year-over-year increase in dry powder was the result of Blackstone raising a new global private equity fund, Blackstone's $7.5 billion Strategic Partners Fund VII, and a European opportunistic real estate fund, Blackstone Real Estate Partners Europe V.

Net income under GAAP attributable to the Blackstone Group was $368 million in the fourth quarter, up from $312.9 million in the third quarter and $200.9 million in the fourth quarter of 2015.

Net management and advisory fees were $630 million in the fourth quarter, which was less than performance fees of $741.6 million and total investment income of $116.3 million. By comparison, management and advisory fees were $596.2 million in the third quarter, less than total performance fees of $671 million but outstripping total investment income of $143 million in the third quarter. In the year-earlier quarter, Blackstone earned $648 million in management and advisory fees, $193.4 million in total performance fees and $21 million in total investment income.