Blackstone assets reach $1.37 trillion; distributable earnings fall 9% on lower gains

Blackstone (NYSE: BX), the world's largest alternative asset manager, said on Thursday that assets under management rose 10% from a year earlier to $1.37 trillion, while distributable earnings fell 9% in the third quarter as it realized fewer investment gains, according to its earnings release.

What happened

Total assets under management were $1,368.3 billion at September 30, up 10% from $1,241.7 billion. Fee-earning AUM, the assets on which Blackstone charges management fees, was $989.7 billion, up 9%. Perpetual capital, which does not have a fixed end date, was $562.3 billion, up 12%.

Inflows were $63.3 billion in the quarter, including $55.4 billion into fee-earning strategies, and $271.6 billion over the last 12 months. The firm deployed $30.1 billion in the quarter and realized $33.1 billion of investments.

Fee-related earnings, which come from management fees and exclude performance-based income, were $1.572 billion, up 6% from $1.481 billion, or $1.26 per share. Distributable earnings were $1.716 billion, down 9% from $1.889 billion, or $1.32 per share. Realized performance revenues fell 38% to $464 million, and net realizations fell 34% to $332 million. Total segment revenues were $3.217 billion, down 3%.

Net accrued performance revenues, gains not yet realized, were $7.3 billion, or $5.84 per share. Blackstone said that realizations across strategies caused them to be lower than at the end of the second quarter. GAAP net income was $1.3 billion, of which $662 million was attributable to Blackstone Inc.

Performance

Blackstone reported gross returns of 2.8% in the quarter for its corporate private equity strategy (14.7% over the last 12 months), 1.6% for core-plus real estate (4.3%) and negative 3.2% for opportunistic real estate (negative 4.0%).

Dividend

Blackstone declared a dividend of $1.12 per share, payable on November 9 to holders of record on November 2. Dividends over the last 12 months were $5.06 per share. The firm repurchased 0.2 million shares in the quarter.

What management said

Chairman and Chief Executive Stephen A. Schwarzman said the firm delivered "strong third-quarter results amid a volatile external environment," and that its flagship strategies "outperformed comparable public market indices."