Blackstone closes in on $1trn in AUM

Blackstone is just $50 billion short of its $1 trillion assets under management forecast – a number spoken about on its investor day in 2018.

The firm’s total assets rose 30 percent year on year to $950.9 billion, as of end-September. About three years ago, assets managed by Blackstone stood at $554 billion.

Drivers of AUM growth over the years have included an expansion of its strategies and offerings, the proliferation of perpetual capital vehicles, inorganic M&A and its focus on the private wealth channel.

Speaking about private wealth on a call accompanying the firm’s third-quarter results, Blackstone president and COO Jonathan Gray said: “One of the long-term mega-trends transforming the landscape is that individual investors are finally getting access to alternatives in a form and structure that works for them. This development has been led by Blackstone and our distribution partners, and the response has been powerful.”

The firm now manages $236 billion of private wealth AUM, up 43 percent in the past 12 months alone, according to Gray. He added that in the third quarter, sales in the channel totalled $8 billion, including $6.6 billion for its perpetual vehicles.

Gray added: “In the last quarter, stock market volatility meaningfully [impacted] net flows in these vehicles. That said, this is a vast and underpenetrated market.” The firm plans to launch more products dedicated to the private wealth channel, as well as to deepen penetration with existing partners and add new relationships, he said.

In October last year, Blackstone’s global head of private wealth solutions, Joan Solotar, said the firm was planning to double its private wealth team from what was then 160 professionals by the end of 2022.

The firm is progressing toward its $150 billion fundraising target, with more than half of the required capital raised at this point.

The firm gathered a further $5.6 billion in the third quarter for its latest flagship PE fund, Blackstone Capital Partners IX, bringing total capital raised to $14.4 billion for the vehicle. The target is undisclosed; media reports indicate the firm could seek as much as $30 billion.

Teachers’ Retirement System of Louisiana, Minnesota State Board of Investment and Cathay Life Insurance are investors in the fund, data from affiliate Private Equity International shows.

It is also nearing the $20 billion mark for its latest secondaries offering, Strategic Partners Fund IX, having raised $17.2 billion as of end-September.

Blackstone’s private equity assets as of end-September stood at $283.3 billion, up 22 percent from $231.5 billion in Q3 last year. Inflows were $7.4 billion in the quarter – including $2.1 billion for the fourth Blackstone Tactical Opportunities fund and $766 million for the second Corporate Private Equity Asia fund – and $27.5 billion over the last 12 months.

Realisations in the PE segment were down year-on-year: $5.3 billion in the quarter versus $10.8 billion in Q3 2021. Capital deployed had also dropped, at $7.6 billion in the quarter compared with $10.2 billion in the same period last year.