Blackstone group fourth quarter profit surges 62%

Revenue rose 71% in fourth quarter and the firm attracted $32.3bn of capital

FILE PHOTO -  The logo of Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid/File Photo
Powered by automated translation

Blackstone Group, the world's biggest alternative asset manager, reported a 62 per cent increase in fourth quarter net profit on Wednesday on the back of higher earnings.

The US-based company grew quarterly profits to $748.9 million as revenue rose by 71 per cent to $3.63 billion. However, profits for the full year almost halved to $1.04bn as revenue fell 17 per cent to $6.1bn.

"Blackstone achieved record results in the fourth quarter," the company's chairman and chief executive, Stephen Schwarzmann, said. "Despite the highly challenged economic backdrop in 2020, we continued to deliver differentiated investment performance for our limited partners, leading to nearly $100bn of capital inflows – the fourth consecutive year at this level or better."

Assets under management rose 8 per cent year-on-year by December 30 to $610bn, with fee-earning assets up 15 per cent to $469.4bn.

Inflows reached $32.3bn during the quarter and $95bn for the year. The company's perpetual capital assets grew by 30 per cent to $134.9bn.

More than one-third of the inflows, or $33.4bn, was into the company's real estate business, the credit and insurance arm attracted $28.1bn, private equity $23bn and its hedge fund solutions arm $10.4bn.

All of its divisions reported positive performance, with its core real estate business offering a gross return of 7.9 per cent over the 12-month period and its corporate private equity arm growing 11.9 per cent. Its hedge fund arm provided a gross return of 5.5 per cent and its credit arm 4 per cent.

The company deployed $61.7bn of capital during the year, including a record $25.4bn in the final quarter. It also committed but did not deploy a further $7.1bn in during the period, and has $147.7bn of dry powder ready to invest.

"Looking forward, we have an extraordinary range of growth initiatives across every area of the firm, with an increasing focus on perpetual capital. The firm ended 2020 in a position of strength and we have great confidence in the path ahead," Mr Schwarzmann added.

The company's share price traded flat at $64.90 at 5.32pm in the UAE.

On Tuesday, insurer Allstate Corporation said it is selling most of its life insurance business to entities managed by Blackstone for $2.8bn.

Allstate's chief executive Tom Wilson said it is "deploying capital out of lower growth and return businesses while continuing to execute our strategy to grow market share in personal property-liability and expand protection solutions for customers".