Blackstone gathered $95 billion of inflows across strategies last year, the fourth consecutive year approaching or exceeding $100 billion.
Compared with 2019, however, new capital commitments dropped about 30 percent, according to its fourth-quarter and full-year 2020 earnings materials released on Wednesday. 2019’s total was bolstered by a ‘supercycle’ of its flagship funds including the $26.2 billion BCP VIII.
Blackstone raised $23 billion during the year for its corporate private equity portfolio, of which $12.5 billion was for private equity, including the $4.6 billion Blackstone Life Sciences V, the largest life sciences dedicated PE fund to date. It raised $5.6 billion for tactical opportunities, $4.1 billion for secondaries and around $900 million for infrastructure.
The firm expects its inaugural growth equity vehicle to soon reach its $4.5 billion hard-cap, Jonathan Gray, president and chief operating officer, said on an earnings call accompanying the Wednesday results. It is also raising its second Asia fund, which is set to be meaningfully larger than its $2.3 billion debut fund for the region, as well as the fourth vintage of its tactical opportunities program, Gray said.
Gray noted that the firm’s holdings in life sciences and those connected to the digital economy are the largest drivers of performance in the firm’s funds. These include logistics, digital payments and enterprise software.
Appreciation across strategies led to an 8 percent increase in net accrued performance revenues to $3.8 billion quarter-over-quarter.
The firm’s corporate PE portfolio generated gross returns of 10.6 percent during the fourth quarter and 11.9 percent for the full year, according to the earnings materials. That compares with 1.5 percent and 9.3 percent respectively in 2019.
The New York-headquartered firm deployed $25.4 billion in the fourth quarter, up nearly 47 percent from the same period the prior year. Full-year deployment stood at $61.7 billion, almost in line with 2019’s $62.9 billion.
The firm’s private equity arm put $8.2 billion to work in the quarter, an increase of 41 percent from the prior year. Investments for the year stood at $22.9 billion, down 13 percent from 2019. Realizations stood at $7.6 billion in the quarter and $17.3 billion for the year.
The firm made $2.4 billion in fee-related earnings last year, up 33 percent from 2019.
Total AUM increased to $618.6 billion, as of December 31, up 8 percent year-on-year.
On geographies in which to ramp up investments, Gray said he puts Asia at the top of the list based on the scale of the economies in China and India.
“There’s an opportunity over time for us to offer products that are RMB-based. That could be something that happens over time, that could be large scale,” Gray said.
He added that the firm could also do more in Japan, where “there’s a strong desire for returns from individual investors and institutions.” India, meanwhile, has been the firm’s “greatest strength in Asia,” where it has actively deployed capital in both private equity and real estate.
Gray also said the firm “isn’t anywhere near the end for secondaries, in terms of growth.” He reported that the latest flagship of its Strategic Partners secondaries business is over 75 percent committed and the firm expects to start raising the successor later this year.
“We also expect to grow adjacencies like infrastructure and real estate secondaries.”
The firm has also launched a strategy which will focus on GP-led secondaries – investing alongside GPs in high-quality assets they want to continue to own beyond their initial fund terms, Gray said.