Blackstone credit assets grew 13% in 2019

The credit business grew more slowly than other parts of Blackstone but performing credit returns remained robust.

Blackstone has increased its credit assets under management by 13 percent due to strong inflows from both US and European strategies, according to its latest earnings report.

Total AUM for the debt business reached $144.3 billion with inflows of €6.9 billion in the fourth quarter and $31.1 billion over 2019, a 27.5 percent increase over 12 months. Fee-earning assets grew more slowly, up 10 percent to $106.45 billion.

The firm’s US direct lending strategy brought in $2 billion in the quarter and has seen inflows of $6.2 billion over the course of the year. Its European direct lending strategy was also popular with investors, raising $1.4 billion in the quarter and $4 billion in total during 2019.

Blackstone’s credit business made realisations worth $2.3 billion in Q4 and deployed $3.6 billion during the quarter.

However, the distressed credit business made a gross return of -0.8 percent, while performing credit returns were 3.8 percent. Full-year returns in distressed are now -4.4 percent while performing credit returns reached 14.4 percent.

The wider Blackstone group grew its revenues to $7.3 billion at the end of 2019, up from $6.8 billion in 2018. Net income before taxes was $3.8 billion, up from $3.5 billion over the same period.

Assets under management also grew more quickly in other segments of the business, growing 20 percent in real estate and 40 percent in private equity.

Blackstone’s GSO credit business saw the loss of the final of its three founders at the end of 2019 when Bennet Goodman departed the firm. At the end of last year, the company was in the process of negotiating with investors over a key-man clause related to Goodman and another departing executive, Jason New.