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Blackstone Ended 2015 with Record Dry Powder

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Undrawn capital

Blackstone (BX) continually attracted a large amount of capital backed by the strong operating performance of its various funds. The company continued to attract new capital across its product offerings. The company’s total dry powder, or undrawn capital, rose by 73% to a record $79.7 billion—compared to the same quarter last year. The increase in undrawn capital was driven by fundraising for the latest global private equity and real estate funds. Blackstone made significant realizations in the real estate and private equity segments.

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Performance-fee-eligible assets under management rose by 22% to $249.6 billion in 4Q15—compared to 4Q14. The company’s performance-fee-eligible funds not yet invested rose by 88% on a year-over-year basis to $80 billion. Blackstone deployed capital of $15.7 billion in the fourth quarter. Its total deployment in the current year stood at $32.4 billion.

Expanding balance sheet

Blackstone had $4.2 billion in total cash, corporate treasury, and liquid investments. The company’s total net value expanded by 12% to $9.5 billion or $8.01 per common unit. The company can take advantage of a distressed market environment and deploy dry powder at lower valuations.

Blackstone generated a 28% return on equity in the last fiscal year, the highest among its alternative investment peers that form part of the iShares Dow Jones US Financial ETF (IYF). In comparison, Blackstone’s peers posted the following returns on equity:

  • The Carlyle Group (CG) generated a 13.9% return on equity.
  • KKR & Co. (KKR) generated a 12.5% return on equity.
  • Apollo Global Management (APO) generated a 3.1% return on equity.

The company maintained its rating of A+/A+. Its net debt was nil. Its overall capital structure remained strong.

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