Skip to main content
MENU
Subscribe
  • Login
  • My Account
  • Logout
  • Register For Free
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • CIOs
    • Consultants
    • Defined Contribution
    • ESG
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Private Credit
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • Special Reports
    • Washington
    • White Papers
  • International
    • U.K.
    • Canada
    • Europe
    • Asia
    • Australia - New Zealand
    • Middle East
    • Latin America
    • Africa
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2024
    • Eddy Awards
  • Resource Guides
    • Active Thematic Global Equities
    • Retirement Income
    • Fixed Income
    • Pension Risk Transfer
    • Pooled Employer Plans (PEPs)
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
  • Print
Breadcrumb
  1. Home
  2. ALTERNATIVES
October 19, 2023 03:41 PM

Blackstone's AUM stays flat at $1 trillion in Q3, but up 6% year over year

Arleen Jacobius
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Schwarzman2019_i.jpg
    Bloomberg
    Stephen Schwarzman, chief executive officer of Blackstone Group.

    Blackstone reported $1 trillion in assets under management at the end of the third quarter, flat from the prior quarter and up 6% year-over-year.

    "Today's environment is an extremely challenging one for investors to navigate," said Stephen A. Schwarzman, Blackstone chairman and chief executive officer during Blackstone's third quarter earnings call on Oct. 19.

    Related Article
    Blackstone moves all credit strategies into its credit and insurance business

    Higher interest rates, economic uncertainty, geopolitical turbulence, high fiscal deficits, political dysfunction and labor unrest have "adversely impacted investor sentiment," Schwarzman said.

    Against this backdrop, Blackstone executive have chosen to sell fewer assets, he said.

    Even so, Schwarzman noted that nearly all of Blackstone's flagship strategies outperformed indices in the third quarter. He said that the investment performance of Blackstone's private credit portfolio has been "outstanding," with gross returns of 4.6% (3.5% net) in the third quarter and 14.4% (10.5% net) in the year ended Sept. 30.

    Blackstone's liquid credit had a gross return of 3.3% (3.2% net) in the third quarter and 12.7% gross return (12.1% net) in the 12-month period.

    Private and liquid credit are part of Blackstone's credit and insurance business which reported $297 billion in assets under management at the end of the third quarter, up 1% from $295 billion at the end of the prior quarter and a 10% increase from $269 billion as of Sept. 30, 2022.

    "We are the reference institution among global LPs, a position that has been continually reinforced across market cycles of nearly 40 years," Schwarzman said. "We have led the industry's evolution, and I expect we will continue to lead it in the future."

    Blackstone's largest business, real estate, reported $332 billion as of Sept. 30, about flat with $333 billion at the end of the second quarter, but up 4% from $319 billion year-over-year. The firm's opportunistic real estate portfolio depreciated 2% in the third quarter and 4.5% in the year ended Sept. 30 , while its core plus portfolio appreciated 0.3% in quarter but depreciated 1.1% in the year ended Sept. 30.

    The majority of Blackstone's real estate portfolio is in logistics, data centers and student housing, "which continue to benefit from robust fundamentals," said Jonathan Gray. Blackstone president and chief operating officer during the same call.

    "Our data center business, QTS, held in BREIT (nontraded REIT Blackstone Real Estate Income Trust), BPP (core plus fund Blackstone Property Partners), and our infrastructure vehicle was the single largest source of appreciation at the firm, driven by explosive growth in data creation that is being accelerated by the AI revolution," Gray said.

    Blackstone Infrastructure Partners, BREIT and BPP acquired and took private real estate investment trust QTS Realty Trust in 2021 in a $10 billion transaction at a price that represented a 21% premium to QTS' June 4, 2021 share price, QTS and Blackstone announced at the time.

    Related Article
    Blackstone caps fourth tactical opportunities fund at $5.2 billion

    "We are evaluating additional deployment opportunities in the space," Gray said.

    About 8% of BREIT's portfolio is in data centers, he said.

    Overall, Blackstone's inflows were $25.3 billion in the third quarter and $138.9 billion year over year, compared to inflows of $30.1 billion in the second quarter and inflows of $44.8 billion in the year-earlier quarter.

    Inflows for Blackstone's real estate business totaled $9.1 billion in the third quarter, up from $7.9 billion in the second quarter but down from $10.1 billion in the quarter ended Sept. 30, 2022.

    Real estate inflows included $724 million of capital raised in BREIT, down from $791 million of capital raised in BREIT in the second quarter and $4.2 billion raised for the nontraded REIT in the year-earlier quarter.

    However, fewer BREIT investors are asking for their money back, with repurchase requests down nearly 30% from the second quarter and close to 60% from its peak in January, Gray said during the call

    Across its entire business, Blackstone deployed $12.4 billion in the third quarter and $61.4 billion in the year ended Sept. 30. This reflected a slow-down in deployment from $19.5 billion in the prior quarter and $31.3 billion in the third quarter of last year.

    Realizations also slowed to $14.8 billion in the third quarter and $63.4 billion over the last 12 months, compared to $17.2 billion in realizations in the second quarter and $15.7 billion in the quarter ended Sept. 30, 2022.

    While noting that net realizations were down in the third quarter due to the market backdrop, Michael S. Chae, Blackstone chief financial officer, noted that third quarter realizations included a "significant sale" in July by BREIT of a self-storage company (Simply Self Storage to a REIT, Public Storage) for $2.2 billion.

    Chae said it was one of the largest-ever transactions in the sector, generating about $600 million in profit.

    "BREIT's asset sales since the beginning of last year, when interest rates began moving materially higher, have occurred at an average premium to their prior carrying value of 4%," Chae said. "Overall, we've been highly selective in terms of realizations, and activity is likely to remain muted in the near term, given the environment."

    Blackstone reported GAAP net income of $921 million for the third quarter and $2.3 billion for the first 9 months of 2023, compared to GAAP net income of $1.2 billion for the second quarter and $1.4 billion in the six months ended June 30, and GAAP net income of $4 million for the year-earlier quarter and $2.2 billion for the first 9 months of 2022.

    Related Article
    Blackstone is first alts investment firm to hit $1 trillion in assets
    Recommended for You
    Person looking through binoculars with a data screen reflected in the lenses.
    Man Group is said to be in talks to acquire credit firm Bardin Hill
    A trader at the New York Stock Exchange
    Private credit investors to rejigger portfolios amid tariff fears
    The skyline of Riyadh, Saudi Arabia, at dusk.
    Stonepeak chooses Riyadh-based leaders in continued Middle East push
    OCIO: A Specialized Landscape
    Sponsored Content: OCIO: A Specialized Landscape
    Sponsored
    White Papers
    The State of Lifetime Income Report
    The Next Wave of LDI Evolution
    Retirement security to future income wins, TIAA brings you the latest financial…
    U.S. Public Funds Top Performers: Q2 2024
    Generative AI Investing: Opportunities at a Key Tech Inflection Point
    Research for Institutional Money Management: Advancing Physical Risk Modelling,…
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    October 23, 2023 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2025. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • CIOs
      • Consultants
      • Defined Contribution
      • ESG
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Private Credit
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • Special Reports
      • Washington
      • White Papers
    • International
      • U.K.
      • Canada
      • Europe
      • Asia
      • Australia - New Zealand
      • Middle East
      • Latin America
      • Africa
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2024
      • Eddy Awards
    • Resource Guides
      • Active Thematic Global Equities
      • Retirement Income
      • Fixed Income
      • Pension Risk Transfer
      • Pooled Employer Plans (PEPs)
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
    • Print