On December 31, 2016, Blackstone (BX) managed $100.2 billion in its Private Equity division, a rise of 6% on a year-over-year basis that was backed by new flows and a rise in valuations of its holdings. Through February 2017, among Blackstone’s major public holdings, Hilton Worldwide Holdings (HLT) stock rose ~1%, NXP Semiconductors (NXPI) rose 4.5%, Zimmer Biomet Holdings (ZBH) rose 13.2%, and Brixmor Property Group (BRX) fell 4.0%.
Blackstone has seen strong improvement over the past few quarters, was mainly due to the strong performance of the holdings in its Private Equity division and reflecting a better-than-index (IVV) (SPX) performance. The division saw valuation growth of 4.5% in 4Q16, reflecting improved performance of its public and private holdings.
Blackstone’s Private Equity division posted economic income of $222.9 million in 4Q16, against total revenues of $465.1 million. The division’s performance income rose to $252.8 million, compared to $161.1 million in 4Q15. The division’s fee-earning assets rose 34% to $69.1 billion. The division saw new flows of $3.2 billion in 4Q16 across its core private equity fund, tactical opportunities, and strategic partners.
The Blackstone Group (BX) managed new flows of $3.2 billion across its core private equity fund, tactical opportunities, and strategic partners. Limited partners or institutional investors seems to have first preference for the company’s offerings as it attracts more capital when compared with peers Carlyle Group (CG) and KKR & Co. (KKR).
Realizations key in 2017
The Blackstone Group (BX) has raised $16.9 billion toward its private equity offerings in 2016. The company realized $3.8 billion in 4Q16, reflecting public and strategic sales across its segments.
In 2017, as valuations have risen higher, Blackstone can seek more realizations to book profits on investments at higher levels. However, deployment could also remain key as finding investments at lower valuations can be tricky in the high valuations space.
Next, let’s study Blackstone’s real estate performance in 2017.