Blackstone better stock up on bubbly… and it can surely afford the top-shelf stuff.
The private equity super-goliath reports its earnings on Thursday, and analysts are expecting it to announce the crossing of a new rubicon: holding over $1 trillion in assets under management.
Trillion Dollar Triumph
So how’d we get here? At the end of 2009, the firm managed around $100 billion. But as the decade rolled on, Blackstone became a major private capital player as it seized on the vacuum created by post-08 banking regulations that required banks to hold larger loan loss reserves (and thus hampering lending activities). By 2018, the firm reported managing just under $500 million in assets. Then came the ultra-low interest rate era of the 2010s latter years, and Blackstone seized on cheap debt to finance major deals. By the end of 2022, it managed $975 billion, which inched up to $991 billion in its Q1 earnings report.
Now it exists at the top of the alternative investing world for both individuals and traditional institutional investors such as pensions; in the decade between 2012 and 2022, Blackstone earned $1 trillion in investor inflows. It’s difficult to find a corner of the economy in which Blackstone isn’t a major presence:
- Its $68 billion Blackstone Real Estate Income Trust makes it the country’s top commercial real estate player, and the sector marks its fastest-growing pillar.
- In the private capital world, Blackstone claims to have $291 billion in credit and insurance assets under management, while financing over 3,100 individual businesses. This spring’s banking crisis has only fueled its private capital ambitions.
Too Big to Fail? Some inside the firm worry its increased size will hinder its entrepreneurial spirit, sources tell Bloomberg. It will almost certainly invite more watchdog scrutiny. “Private equity firms are no longer private equity firms,” economist Josh Lerner told Bloomberg. “They are complex assemblages. It means more scrutiny from investors and regulators.”