Blackstone is set to have its biggest year yet in fundraising, with expected capital inflows reaching $200 billion.
“On last quarter’s call we said we were highly confident that total inflows would exceed $100 billion again in 2021, the fifth year in a row approaching or exceeding this level,” president and COO Jon Gray said on the firm’s Q2 earnings call on Thursday. “We now expect to approach $200 billion of inflows this year including our pending insurance partnerships.”
Blackstone gathered $37.3 billion across strategies in the second quarter without raising any of its larger flagship funds, and it has raised a total of $116.3 billion over the past 12 months. Perpetual AUM, which Gray previously said was “like planting perennials”, with their recurring and compounding contribution to the firm’s financials, increased 55 percent year-on-year to nearly $170 billion.
Blackstone early this month agreed to acquire a 9.9 percent stake in AIG Life & Retirement and enter a long-term strategic partnership to manage an initial $50 billion of AUM. When fully phased in, that amount will increase to $92.5 billion.
In secondaries, the firm launched Strategic Partners Fund IX, which it expects to be “far larger than its $11 billion predecessor”, Gray said. A first close is targeted for September and the fund will be activated prior to year-end.
Blackstone also held a first close of $769 million for its debut GP solutions strategy, which invests alongside GPs that want to hold high quality assets beyond initial fund terms.
Additionally, the firm has raised more than $5 billion for its second private equity fund dedicated to the Asian region and expects that vehicle to hit its $6.4 billion hard-cap, Gray said.
Total AUM for private equity increased 21 percent to $223.6 billion with inflows of $7.3 billion in the quarter and $24.1 billion over the past year.
Q2 2021 was its best quarter for fund appreciation in the firm’s history, Gray noted during the call. That was driven by the firm’s “positioning towards fast-growing areas of the economy, including logistics, life sciences, sustainability and tech enabled businesses”, he said.
Blackstone’s PE portfolio appreciated 13.8 percent during the quarter and 52.2 percent over the past 12 months, driven by IPOs of TaskUs and Sona Comstar in Asia, as well as broad-based appreciation across industries and sectors, according to the Q2 earnings statement.
Blackstone deployed $23.8 billion in the quarter, of which about 40 percent, or $9.5 billion, was in private equity. Total exit value stood at $19.6 billion in the quarter and a record $63.4 billion over the last 12 months.
The firm made $704 million in fee-related earnings during the quarter, up 30 percent year-on-year. Distributable earnings nearly doubled from last year to $1.1 billion in the second quarter.