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Blackstone’s Hedge Fund Solutions See Inflows

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Inflows and performance fees

In 2Q17, Blackstone Group (BX) saw inflows of $2.0 billion to its hedge fund solutions division. The division also witnessed a rise of 6.0% on a YoY (year-over-year) basis for its AUM (assets under management) on the back of platform diversification, individual investor strategies, and customized strategies. The division’s AUM in 2Q17 was $72.5 billion. The fee-generating AUM of the company’s hedge fund solutions division rose 4.0% YoY to $67.8 billion. The division is being managed by BAAM (Blackstone Alternative Asset Management).

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In 2Q17, the total performance fees for Blackstone’s hedge fund solutions division were $30.0 million compared to $2.0 million in 2Q16, which was a significant rise YoY. However, the division’s total performance fees fell 49.6% sequentially. In 2Q17, the division’s investment income also saw a rise of 33.0% YoY, coming in at $12.0 million. The division’s economic income in 2Q17 was $82.4 million, which was a rise of 13.0% YoY. However, the division’s economic income fell 28.4% sequentially.

Total debt-to-total-capital ratio

Blackstone (BX) currently has a total debt-to-total-capital ratio of 58.1%, which is lower than its peers. Alternative asset managers (XLF) have the following ratios:

  • KKR & Co. (KKR): 76.4%
  • Carlyle Group (CG): 94.4%
  • Apollo Global Management (APO): 71.9%
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