Blackstone Sees Record Fundraising Haul of $134 Billion
Blackstone deployed $62.9 billion in 2019, including its purchase of the Bellagio Las Vegas.
(Bloomberg) -- Blackstone Group Inc. saw a record fundraising haul last year, as investors continue to hunt for returns in a low-yield environment.
Steve Schwarzman’s firm took in $26 billion in the fourth quarter, it said Thursday, contributing to a full-year total of $134.4 billion. Assets under management climbed to $571.1 billion, also a record. Executives said on a conference call that the firm could bring in an additional $100 billion this year.
The New York-based firm is bringing in flows much faster than it can use the capital, highlighting a conundrum for many alternative asset managers. President Jonathan Gray said Wednesday that the investing environment is “very challenging,” due in part to high valuations and relatively low global economic growth.
The shares fell along with Apollo Global Management Inc. after that firm gave a lackluster forecast. Blackstone slid 2.7% to $60.97 at 12:25 p.m. in New York.
The firm deployed $62.9 billion in 2019, including its purchase of the Bellagio Las Vegas. Blackstone’s credit group invested $3.6 billion in the quarter, led by direct lending.
Gray, on Thursday’s call, pointed to “innovative transactions” that give Blackstone an edge in a tough investing climate, singling out a sale lease-back strategy the firm is using in Las Vegas and a drug for bladder cancer the life sciences group is backing.
Though deals are getting harder, “a combination of fundraising, returns and monetizations across equity and real estate points to Blackstone’s ability to navigate the late-cycle environment,” Bloomberg Intelligence analyst Paul Gulberg wrote last week.
The private equity industry had amassed almost $1.5 trillion in unspent capital at the end of 2019, the highest year-end total on record, according to data compiled by Preqin. Blackstone’s dry powder grew last quarter to $151 billion, according to Thursday’s earnings statement.
Low growth is likely to persist as will current price levels, Gray said at a meeting Wednesday of the New Jersey State Investment Council.
Blackstone’s distributable earnings rose to $914 million, or 72 cents a share, from $722 million, or 57 cents, a year prior, it said on Thursday. That beat the 66-cent average estimate from analysts surveyed by Bloomberg.
To contact the reporter on this story: Heather Perlberg in Washington at hperlberg@bloomberg.net
To contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, Josh Friedman, Steve Dickson
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