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Understanding Blackstone’s Private Equity Division

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Corporate private equity funds rise

The Blackstone Group’s (BX) corporate private equity funds rose 3.3% in 3Q17, thanks to its private portfolio. However, the company’s public portfolio fell in 3Q17, impacting its private equity division.

Over the last twelve months, corporate private equity funds rose 16%. Blackstone’s TTM (trailing-12-month) ROE (return on equity) was 25.4%. Peers (XLF) KKR (KKR), Apollo Global Management (APO), and The Carlyle Group (CG) saw TTM ROEs of 17.6%, 60.9%, and 26.4%, respectively.

In 3Q17, the companies in Blackstone’s private equity portfolio reported strong EBITDA (earnings before interest, tax, depreciation, and amortization) and revenue performance, and its private equity division had realizations of $2.4 billion.

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Deployments

Blackstone’s private equity division deployed $4.3 billion in 3Q17. This sum includes the deployment related to Strategic Partners and Ascend Learning and the investment related to Tactical Opportunities. The division reported total assets under management of $102.5 billion in 3Q17, which implies a 3% rise year-over-year, and inflow of $3.3 billion.

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