Largest alternative asset management with more than 1 trillion AUM! I love businesses that can generate increasing revenues!!
It focuses on alternative investment and currently had US$1.04 trillion AUM. Based on their last earning report, they have 4 core pillars; real estate (US$336.9 billion, up 3.3% yoy), private equity (US$304 billion, up 5.2% yoy), credit and insurance (US$318.9 billion, up 13.9% yoy), hedge fund solutions (US$80.3 billion, up 0.75% yoy).
▪Total AUM increased to $1,040 billion, up 7% year-over-year, with $52.7 billion of inflows in the quarter and $148.5 billion for the year
▪Fee-Earning AUM of $762.6 billion was up 6% year-over-year, with $44.6 billion of inflows in the quarter and $119.4 billion for the year
▪Perpetual Capital AUM reached $396.3 billion, up 7% year-over-year. Fee-Earning Perpetual Capital AUM reached $338 billion, representing 44% of Fee-Earning AUM.
The unique point about Blackstone is that vast majority of their AUM today is under long-term contracts or even perpetual structures, helping them to avoid the large decreases in AUM experienced by many other money managers - which we have observed in current environment. Their model also provides them the advantage of patience to buy assets, and the flexibility to sell when the time is right.
For the past year, inflows reached $148.5 billion. Driving a 7% increase in AUM, to reach a record high of US$1,040 billion and the best is yet to come! They were about midway through the largest fundraising cycle in their history with enormous support from limited partners, providing them with an unprecedented US$200 billion of dry powdered capital. Blackstone's unique fundraising cycle and deployment of dry powder should significantly expand the firm's earnings power and fee-related earnings over time.
The key question is how can Blackstone generate these extraordinary results while most other money managers are suffering? It is the power of their brand and superior performance over the years, which have enabled them to build unique relationships with their clients over decades. Blackstone has also benefited from the remarkable trend started over 30 years ago of increasing allocations to alternative managers as investors seek higher, sustainable returns, including retail investors, which represent a vast and largely untapped market.
Over the last twelve months, they have been on a huge buying spree acquiring different businesses & properties such as casino, student hostels etc. The amount of available dry powdered capital is immense!!! Samsung Group's insurance units signed a recent deal worth $650 million with US-based private equity firm Blackstone to expand its global alternative asset portfolio. Samsung Life Insurance and non-life insurer Samsung Fire ＆ Marine Insurance will invest in overseas real estate, infrastructure and private equities managed by Blackstone through the latest deal. To add on, there's a recent US$4.5 billion real estate deal with the University of California.
The company's stock is up an impressive 205% over a period of 5 years (For comparison, S&P 500 and Alphabet are only up 72% and 148% over a 5 years period!) Their AUM is growing steadily even in a bear market, imagine what will happen in a bull market?? Food, energy and properties are core necessities that we can't do without and Blackstone Group has tons of properties under its portfolio!
It will be reporting its earning tomorrow before market opens. Do you have this stock in your portfolio?? Do let me know your thoughts!!
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