Blackstone Group reported a record $457 billion in assets under management as of Sept. 30, up 4% from the quarter ended June 30 and 18% from the end of the year earlier quarter, according to the alternative investments firm's earnings report released Thursday.
Blackstone Group attributed the asset gain for the 12-month period to $125 billion in inflows. Gross inflows in the third quarter amounted to $24 billion.
The "biggest drivers" included capital for Blackstone's latest private equity energy fund, a new direct lending business and growth in its tactical opportunity fund, said Jonathan Gray, president and chief operating officer of Blackstone Group, during an earnings conference call.
Mr. Gray said Blackstone added two perpetual life vehicles during the third quarter and the firm's total perpetual capital has grown to $68 billion.
"We have a line of sight on $150 billion of potential inflows," including raising new vintages of four of its flagship funds, each of which should be larger than the current funds, he said. The four are corporate private equity, private equity secondaries, global opportunistic real estate and European opportunistic real estate.
Blackstone's credit business had the most AUM growth, increasing 31% year-over-year and up 2% in the quarter ended June 30 to $130.6 billion.
Private equity AUM grew 23% year-over-year to $126.2 billion from $102.5 billion as of Sept. 30, 2017. For the quarter, private equity AUM was up 6%.
Real estate grew 8% year-over-year to $119.9 billion, and was flat from the quarter ended June 30. Hedge fund assets also were up 8% from a year earlier and 3% from the prior quarter, to $80 billion.
Across its investment segments, Blackstone earned $779 million in management and advisory fees in the third quarter under GAAP, compared with $721.4 million in the second quarter. Performance revenues were $901 million, compared to $19.4 million in incentive fees in the prior quarter. Realized principal investment income was $94 million, compared with $129.2 million in the quarter ended June 30.
GAAP net income was $949 million for the quarter and $3.3 billion for the year ended Sept. 30. By comparison, GAAP net income was $1.6 billion for the second quarter and $764.6 million for the year ended June 30.
