On January 25, global private equity giant Blackstone released its financial data for the fourth quarter and full year of 2023, and GPLP compiled its specific core data according to the financial report as follows:
1. Net income:
Blackstone's GAAP net income was $109 million in the fourth quarter and $2.4 billion for the full year. GAAP net income attributable to Blackstone was $152 million for the quarter and $1.4 billion for the full year, a slight decline year-over-year, for the full year 2022 net income of nearly $1.75 billion.
Chart: Blackstone's fourth-quarter and full-year 2023 financial revenues, data source: Blackstone's financial report
2. Manage assets and investment income
As of December 31, 2023, Blackstone's total assets under management (AUM) were $1,040.2 billion, up 7% year-over-year, of which fee-based AUM was $762.6 billion, up 6% year-over-year, and perpetual AUM was $396.3 billion, up 7% year-over-year, of which fee-based perpetual capital was $338.0 billion, accounting for 44% of Blackstone's fee-based revenue assets under management.
Chart: Blackstone's Q4 and full-year 2023 AUM change data, data source: Blackstone's earnings report
Inflows were $52.7 billion in the fourth quarter of 2023 and $148.5 billion for the full year, with Blackstone deploying $31.1 billion in the fourth quarter and $73.8 billion for the full year. Earnings of $15.8 billion were realized in the fourth quarter and $65.7 billion for the full year 2023.
Chart: Blackstone's fourth-quarter and full-year 2023 inflows, deployments and earnings, data source: Blackstone's earnings report
By sector, real asset AUM increased 3% to $336.9 billion in the fourth quarter, with inflows of $19.9 billion in the fourth quarter and $53.9 billion for the year, and its joint venture with the FDIC (Washington-Federal Deposit Insurance Corporation) to acquire Signature Bank's commercial senior mortgage portfolio led to its fourth-quarter inflows of $10.5 billion, according to Blackstone's financial report. In addition, Q4 inflows included $3.8 billion in BREDS Insurance SMAs, $1 billion in the European Opportunities Fund VII, and others. In addition, the real assets segment deployed a total of $15 billion for the year, achieving a total of $18.7 billion.
Chart: Blackstone's physical asset changes for the fourth quarter and full year of 2023, data source: Blackstone's earnings report
PE segment AUM increased 5% to $304 billion in the fourth quarter, with inflows totaling $23.8 billion for the year, $24.5 billion deployed for the year, and cumulative earnings of $23.2 billion. The inflows included $755 million from its ninth flagship private equity fund, while raising initial capital totaling $1.8 billion for the fourth infrastructure secondaries vintage and completing the eighth real estate Secondaries vintage), which included $725 million in capital raised during the fourth quarter.
Blackstone launched the Blackstone Private Equity Strategies Fund ("BXPE") on January 2, with an initial $1.3 billion raised not included in total AUM, and $6.6 billion in the fourth quarter from a capital placement perspective, including investments in Northern Indiana Public Service Company ("IPSCO"), Groupe Premium and Power Grid Components' investment totaled $24.5 billion for the year. In addition, additional $8.4 billion was committed during the fourth quarter, including investments in Adevinta, Rover, Civica and Digital Realty. Returns totaled $5.4 billion in the fourth quarter, including returns from Guidon Energy and IntraFi, and corporate private equity investments appreciated 3.5% in the fourth quarter and 12.1% for the full year. Tactical opportunistic investments appreciated by 3.5% in the fourth quarter and 6.6% for the year, while secondary market investments declined by about 1.3% in the fourth quarter and completed a 2.3% appreciation for the full year, and infrastructure appreciated by 1.0% quarterly, for a cumulative appreciation of 12.1% for the year.
Chart: Blackstone's PE asset changes in the fourth quarter and full year of 2023, data source: Blackstone's financial report
In its credit and insurance segment, AUM for the year increased by 14% to $318.9 billion, with inflows of $23.2 billion in the fourth quarter and $62.5 billion for the year. Quarterly inflows included $7.6 billion in the global direct lending strategy, including $2.7 billion in equity raised for BCRED (Blackstone Private Credit Fund), and increased total assets under management for direct lending to $110 billion.
Chart: Blackstone's changes in credit and insurance assets for the fourth quarter and full year of 2023, data source: Blackstone's financial report
Finally, its Hedge Fund Solutions segment had total assets under management of $80.3 billion, and its BPS compound gross return of 2.3% (net return of 2.1%) in the fourth quarter, outperforming the HFRX Global Hedge Fund Index, which was 1.7%.
Chart: Blackstone's Hedge Fund Solutions asset changes for the fourth quarter and full year of 2023, data source: Blackstone's earnings report
In terms of distributable income of the Group and its segments, the distributable income of the fourth quarter of 2023 was US$1.5 billion, compared to US$5.6 billion for the full year, and the highest distributable income was in real assets, which was US$534 million in the fourth quarter and US$2.27 billion for the full year.
Chart: Blackstone's distributable earnings by segment for the fourth quarter and full year of 2023, data source: Blackstone's financial report
3. Income of its funds
As of December 31, 2023, Blackstone had $8.4 billion in total cash, cash equivalents, corporate finance and other investments, and $16.9 billion in cash and net investments, while Blackstone has an undrawn credit line of $4.3 billion and maintains an A+/A+ credit rating.
Chart: Blackstone's cash and net investments for the fourth quarter and full year of 2023, data source: Blackstone's financial report
At present, Blackstone Group has a total of about 66 funds, with an average return of at least double, among which the best return real assets II (BREP II), which was established in 1996, has a return multiple of 2.8, from the perspective of each section, the total return of real assets is 1.8 times, and the PE sector is 2 times the return, it is worth pointing out that among the PE funds, there are two BCP Asia I and BCP Asia II focused on the Asian market, which have returns of 2.3 and 1.5 respectively. For other segments, please refer to the following charts:
Chart: Blackstone's 2023 fund income data, data source: Blackstone's financial report
Overall, Blackstone's financial report is in line with expectations, from assets under management to investment income, as well as the fundraising and closing of new funds, all of which have set a record in 2023, which is already Blackstone's "miracle" for several consecutive fiscal years. For Wall Street, Blackstone's performance has given investors strong confidence, which can also be seen in the stock price, as of 00:30 Beijing time on January 26, Blackstone's stock price increased by 3.34% to $124.68 after the earnings report.
At present, from the ability to raise funds, to the investment vision, or invincible existence, Schwarzman said that it believes that Blackstone is in a long-term accelerated growth phase, while the original business is developing positively, its new BXPE fund in January also recorded more than expected results, although it is currently smaller than other funds, but Schwarzman believes that retail and insurance channel funds have about $110 trillion in assets worldwide, which is twice the number of institutional channels. And for these sector investments, for Blackstone, will play a huge role in the future.
Source: Real estate asset management