The Blackstone Group L.P. (BX) has focused on operational performance and growing its portfolio of companies rather than just buying at cheaper valuations. Since 2011, the company has added $200 billion to its assets under management (or AUM).
Blackstone attracts the majority of its new flows in the fee earning category. Its assets in the fee earning category were up by 9% compared to last year. The $49 billion of gross inflows were higher than the $31.5 billion of realizations and outflows.
Strong market appreciation
Overall, Blackstone’s AUM expanded by 9% to $290 billion. AUM expanded by a combination of new flows and strong market appreciation of the portfolio companies. The strong market appreciation added $24.5 billion in 2014, and gross inflows totaled $56.9 billion.
Among the segments, private equity and hedge fund solutions witnessed the fastest growth. Two of Blackstone’s primary limited partners are corporate and public pension funds. The company has a strong network of 1,300 limited partners through its sector-agnostic and real estate funds. The launch of innovative ideas at the right time can help it attract a good amount of new capital through its dedicated network.
Blackstone (BX) has been strong in attracting and maintaining human capital. It has one of the best compensation structures when compared with its peers in the alternative management space. These peers include the Carlyle Group (CG), KKR & Co. L.P. (KKR), Apollo Global Management (APO), and T. Rowe Price (TROW). Its peers also include other major players that form part of the Financial Select Sector SPDR Fund (XLF) and the iShares U.S. Financials ETF (IYF).