Blackstone Group on Thursday reported $564.3 billion assets under management as of June 30, a 4.9% increase from March 31 and up 3% year-over-year.

Stephen A. Schwarzman, chairman and CEO, attributed the what he called a strong quarter to a sharp rebound in investment performance, deployment of capital especially into the public markets and $20 billion in inflows.

Blackstone has $156 billion in dry powder, which Mr. Schwarzman said was an industry record.

The firm invested about $11 billion in public market opportunities resulting from the pandemic.

However, private market opportunities resulting from COVID-19 crisis will take longer to materialize, said Jonathan Gray, president and chief operating officer, during an earnings call.

The private market investment opportunities “are still ahead of us,” Mr. Gray said. Private companies will use their own capital first before some of them hit a wall and in real estate, foreclosures take time, he said.

However, the U.S. Department of Labor’s decision to allow private equity in defined contribution plans will result in multiple billions of dollars in assets that could be invested with private equity firms, Mr. Gray said. He added that Blackstone will get “a reasonable share of that.”

But it will be “a long journey,” he said. “We have to work with folks over time to get them to go in this direction,” and include private equity in target-date-funds, Mr. Gray said.

Blackstone executives think the defined contribution plan sector is “a real opportunity,” but it will take time for it to emerge, he said.

Blackstone’s largest business, private equity had $184.1 billion in AUM as of June 30, up 5.8% from March 31and up 7.5% from June 30, 2019. Real estate assets were $166.7 billion, a 3.6% increase from three months earlier and an 8.5% increase year-over-year.

Credit and insurance assets were $137.8 billion as of June 30, up 7% from three months earlier but down 1.1% from 12 months earlier. Hedge fund AUM was $75.7 billion, up 2.7% from March 31 but down 7% from June 30, 2019.

GAAP net income was $1.4 billion for the quarter, but the firm had a $1.3 billion GAAP net loss year-to-date.

Source: Pionline


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