Blackstone Group reported a record $472.2 billion in assets under management as of Dec. 31, up 3% from the quarter ended Sept. 30 and 9% from the quarter ended Dec. 31, 2017, according to the alternative-investments firm's earnings report released Thursday.
"As everybody knows, the fourth quarter was an extremely difficult period for markets and for most participants in the financial community. Risk assets declined sharply across the board," Chairman and CEO Stephen A. Schwarzman said during a conference call Thursday. "Against that background, Blackstone's funds preserved capital in the quarter — hard to believe, and for the full year dramatically outperformed market indices in almost every area."
He attributed the outperformance against the public markets and the "preservation of capital in the fourth quarter" to capital inflows of more than $100 billion in the year.
"In the midst of the financial hurricane that was the fourth quarter, our gross inflows reached $40 billion, our second-best ever," Mr. Schwarzman said.
Blackstone's new infrastructure fund has raised $7 billion so far and has made two investments.
Blackstone's hedge fund business had the most growth in AUM for the year, up 36%, but was down 2.8% to $77.8 billion from the Sept. 30 quarter.
Private equity was up 23.8% for the year ended Dec. 31, and up 35.7% to $130.7 billion from the prior quarter. Real estate was up 18.1% year-over-year and up 4.3% from Sept. 30 to $136.2 billion
After showing the most growth in the year ended Sept. 30, Blackstone's credit business AUM fell 7.7% for the year ended Dec. 31 and was down 2.4% for the quarter to $127.5 billion.
Across its investment segments, Blackstone earned $797.6 million in management and advisory fees in the fourth quarter, compared with $729.1 million in the year-earlier quarter. Incentive fees were $15.8 million, compared with $120.2 million in the quarter ended Dec. 31, 2017. Realized principal investment income was $109.9 million, compared with $184.6 million in the quarter ended Dec. 31, 2017.
GAAP net loss was $79 million for the quarter and GAAP net income was $3.3 billion for the year ended Dec. 31. By comparison, Blackstone had a net income of $949 million for the third quarter and $3.3 billion for the year ended Sept. 30. Blackstone had a net income of $803.5 million for the quarter and $3.4 billion for the year ended Dec. 31, 2017.