Blackstone has returned $50 billion of capital to investors in the past 12 months, according to a second-quarter earnings statement released by the firm today.
The listed alternative assets manager saw its economic net income hit a record high for the quarter of $1.3 billion, up 89 percent – bolstered by significant outperformance from its private equity business.
The firm’s assets under management climbed to $279 billion, despite the $50 billion of distributions, the firm said.
BCP V, the largest ever private equity fund raised at $21.7 billion, crossed its preferred return hurdle rate in the second quarter, generating $509 million in performance fees. The fund closed in 2005, but was forced to hold onto investments for longer than anticipated due to the financial crisis. Now it has passed the hurdle – helped by $5.8 billion in realisations so far in 2014, and including big wins like the recent listing of Hilton Hotels – it can start paying out carried interest.
On an earnings call, Blackstone’s Tony James said that BCP V was likely to double the capital it raised from investors. Its current multiple on invested capital is 1.6x.
Total revenues for Blackstone’s private equity portfolio were up 164 percent to $939 million for the quarter. Private equity realizations were also “robust”, with $4.2 billion of proceeds on ten transactions during the quarter.
On the call, Schwartzman suggested that the $12 billion profit on the Hilton transaction might represent the biggest private equity profit ever.
Blackstone also said its sixth Strategic Partners fund – a dedicated secondaries fund of funds vehicle – has raised $3.2 billion of capital, against a target of $4.4 billion.
“Blackstone’s second-quarter results marked one of our best ever,” Stephen Schwarzman, chairman and chief executive, said in a statement. “As more of our assets under management have seasoned, we’ve been increasingly active in harvesting the value we’ve created over several years.”
At midday, Blackstone shares were trading at $34.20, up 0.65 percent.