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Blackstone’s Performance Stands Out among Managers in 4Q16

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Dec. 4 2020, Updated 10:52 a.m. ET

Beats estimates

The Blackstone Group (BX), the world’s largest alternative asset manager, posted an economic net income (or ENI) of $0.68 in 4Q16, higher than analysts’ estimate of $0.64 and its ENI of $0.57 in 3Q16.

The company saw 86% growth in its ENI to $812 million in 4Q16 on the back of $1.6 billion in revenue. The company saw strong growth in its private equity, real estate, and hedge funds. In its credit division, it saw stable growth considering strong bond prices amid the Federal Reserve’s interest rate hike.

Blackstone reported assets under management (or AUM) of $366.6 billion in 4Q16, compared to $361 billion in the previous quarter, backed by new funds raised worth $16.7 billion and a rise in valuations, partially offset by higher realizations.

On a year-over-year basis, the company saw a rise of 9% in its AUM and 13% in its fee-earning AUM, totaling $277 billion. Blackstone saw strong deployments of $8 billion across its sectors and regions in 4Q16.

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Alternative investment giant

Blackstone provides alternative asset management services, including investment vehicles focusing on private equity, credit markets, real estate, hedge fund solutions, and funds of funds. The company attracts competition from traditional and alternative asset managers that form part of the SPDR S&P 500 Index (SPY).

Blackstone’s revenue rose 10% in 2016 to $5.1 billion, backed by new assets and rises in the value of its investee companies. The revenue growth for Blackstone’s competitors Apollo Global Management (APO), Carlyle Group (CG), and KKR (KKR) fell 60%, 7%, and 18%, respectively, in 2016 due to weak broad markets in the previous year.

In this series, we’ll study Blackstone’s private-market performance, public markets, credit, dividends, and valuations in 4Q16. Let’s begin with its private equity portfolio’s performance in 4Q16.

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