01—Abstract
Summary
Summary of the 10-K filed February 24, 2017. Cited figures are marked; the original filing is the authoritative source.
Blackstone Inc. (BX) reported strong performance in its 2016 10-K filing, showcasing significant growth in assets under management and a healthy realization activity, even amidst volatile market conditions.
The company's Fee-Earning Assets Under Management grew by 13% to $277 billiona, while total Assets Under Management reached a record $367 billion. Blackstone demonstrated robust capital deployment, investing $23 billion in 2016, with new initiatives like Tactical Opportunities and core+ real estate contributing substantially. The firm maintained an industry-leading credit rating with a strong balance sheet, characterized by no net debt and substantial cash reserves.
Key drivers of growth included strong fundraising across all business segments and successful expansion into new strategies, such as Tactical Opportunities, which saw a 30%b contribution to total capital deployed. Blackstone also made strides in diversifying its investor base by extending its institutional-quality solutions to the retail high net worth and family office channels. The report highlights Blackstone's commitment to positive community impact, including its veteran hiring initiatives and support for entrepreneurship.
02—Key points
Key Highlights
- Total Assets Under Management (AUM) reached a record $367 billion, a 9% increase year-over-year.
- Fee-Earning Assets Under Management (FEAUM) grew 13% to $277 billion, driven by strong fundraising across all segments.
- Blackstone deployed $23 billion in capital during 2016, part of its three largest years for capital deployment in history.
- New initiatives like Tactical Opportunities, core+ Real Estate, and Strategic Partners contributed 30% of total capital deployed in 2016, investing an aggregate of $7 billion.
- The company distributed over $8 billion in value to common and Holdings unitholders over the past three years.
- Blackstone maintained an A+ / A+ credit rating from S&P and Fitch, positioning it as the highest-rated alternative asset manager.
- Total revenues increased by 10% to $5.1 billion, primarily driven by a 21% increase in Performance Fees and a 74% increase in Investment Income.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2016filed February 24, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $5.15B$4.65B | +10.8% |
| Operating Expenses | $2.95B$3.09B | −4.6% |
| Interest Expense | $152.65M$144.52M | +5.6% |
| Net Income | $1.04B$709.79M | +46.4% |
| EPS (Basic) | $1.60$1.12 | +42.9% |
| EPS (Diluted) | $1.56$1.04 | +50.0% |
| Shares Outstanding (Basic) | 649.48M634.34M | +2.4% |
| Shares Outstanding (Diluted) | 1.20B1.19B | +0.6% |
05—Questions
Frequently Asked Questions
What was Blackstone's total Assets Under Management (AUM) and Fee-Earning Assets Under Management (FEAUM) at the end of 2016?
At December 31, 2016, Blackstone reported total Assets Under Management (AUM) of $366.6 billion, a 9% increase from the previous year, and Fee-Earning Assets Under Management (FEAUM) of $277 billion, a 13% increase year-over-year.
How did Blackstone's key revenue streams perform in 2016?
Total revenues increased by 10% to $5.1 billion in 2016. This growth was primarily driven by a significant increase in Performance Fees, up 21% to $2.18 billion, and a substantial rise in Investment Income, up 74% to $356 million. Management and Advisory Fees, Net saw a slight decrease of 4% to $2.44 billion.
What were the main contributors to Blackstone's growth in Fee-Earning Assets Under Management in 2016?
Growth in FEAUM was driven by strong inflows across all segments, totaling $68.3 billion. Key contributors included Private Equity ($28.9 billion), Credit ($15.0 billion), Real Estate ($14.2 billion), and Hedge Fund Solutions ($10.1 billion), reflecting successful fundraising and new capital commitments.
What is Blackstone's financial position regarding debt and liquidity?
Blackstone maintained a strong balance sheet with no net debt, $4.6 billion in total cash, cash equivalents, and corporate treasury investments, and a $1.5 billion undrawn revolving credit facility. The company's credit ratings were affirmed at A+ / A+ by S&P and Fitch.
How did new and emerging business initiatives contribute to Blackstone's deployment of capital in 2016?
Blackstone highlighted that three of its largest new initiatives in the past five years—Tactical Opportunities, core+ Real Estate, and Strategic Partners—invested an aggregate of $7 billion in 2016, representing 30% of the total capital deployed during the year.
06—Continue