Blackstone Adds to Deal Fuel With Surge in Long-Term Capital
(Bloomberg) -- Blackstone Group Inc. is raking in money that the firm can hold for a longer period than traditional funds.
The world’s largest alternative asset manager’s “perpetual capital” jumped 19% from a year earlier to $115.2 billion as of Sept. 30, according to an earnings statement released Wednesday. The growth was partly driven by clients who would rather leave their money in longer-term funds even if it could mean lower returns. For asset managers like Blackstone, the coveted vehicles mean stable fees and less-frequent fundraising.
“We remain the partner of choice for limited partners globally, who face a challenging investment environment of historically low interest rates,” Chief Executive Officer Steve Schwarzman said in the statement.
The firm’s shares were down 2.9% at 9:50 a.m. in New York Wednesday.
After taking their licks earlier this year as Covid-19 slammed the global economy, Blackstone’s funds have bounced back and its assets climbed to $584.4 billion at the end of the third quarter. The firm has scored big gains by selling companies including Cheniere Energy Partners LP and recapitalizing BioMed Realty. It’s also benefited broadly from investments in life sciences, logistics and technology -- resilient sectors in an economy stunted by the pandemic.
The strongest returns last quarter were in the private equity group, which saw funds appreciate 12.2% in the recent quarter. Tactical Opportunities funds gained 10.7%, and opportunistic real estate climbed 6.4%, according to the New York-based company.
Blackstone held dry powder of $152.4 billion at the end of September, down about 2% from three months earlier.
The firm also said it began raising money for a new non-traded business development company that will focus on credit investments and help expand long-term capital.
Distributable earnings were 63 cents a share, beating the consensus estimate of 57 cents a share among 18 analysts surveyed by Bloomberg.
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