Blackstone Group reported Thursday a record $248.1 billion in assets under management as of Sept. 30, up 8.1% from June 30.
The firm has $41.4 billion in unspent committed capital, known as dry powder, according to a company statement.
AUM in Blackstone's real estate business rose to $69 billion from $64 billion at the end of the second quarter. The business has raised about $2 billion for its fourth European property fund, which is targeting €5 billion ($6.8 billion), and it's seeking $4 billion for its initial pool dedicated to real estate purchases in Asia.
“Our new investment activity in real estate continues to boom, exceeding dispositions by a wide margin and belying speculation that we are somehow calling a market top,” President Tony James said Thursday on a conference call with reporters. The property group sold $4.6 billion of assets in the first nine months of the year while putting $8.4 billion of equity into new deals, Mr. James said.
“We believe we are just entering Blackstone's real estate monetization cycle and expect efforts to gain steam,” Credit Suisse Group analysts led by Howard Chen wrote in a note to clients Thursday.
Blackstone is chasing deals in Europe, where buyers can find more distressed assets such as real estate threatened with foreclosure and property developers burdened with debt. The firm's credit unit, called GSO, finished raising $5 billion during the quarter to provide financing to companies in distress.
Total performance fees at Blackstone declined 9.6% to $545 million in the quarter, as the carrying value of holdings gained at a slower pace than a year earlier. Blackstone said its buyout portfolio appreciated 4.2%, compared with 7.1% in the third quarter last year.
Total revenue, which includes management fees, performance fees and investment gains, was $1.23 billion. The result missed analysts' average estimate of $1.26 billion.
Third-quarter profit rose 3% as gains in property holdings offset a decline in its buyout unit.
Blackstone's economic net income of $640.2 million differs from U.S. generally accepted accounting principles. Under those standards, known as GAAP, Blackstone had net income of $171.2 million, compared with $128.8 million a year ago.