10-KPeriod: FY2016

Blackstone Inc. Annual Report, Year Ended Dec 31, 2016

Filed February 24, 2017For Securities:BX

Summary

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 billion, 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% 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.

Financial Highlights

35 data points
Beta

Revenue

$5.15B

Net Income

$1.04B

20.2% Net Margin

EPS (Diluted)

$1.56

Total Assets

$26.40B

Cash & Equivalents

$1.84B

Free Cash Flow

-$110.42M

Financial Statements
Beta
Revenue$5.15B
Operating Expenses$2.95B
Interest Expense$152.65M
Net Income$1.04B
EPS (Basic)$1.60
EPS (Diluted)$1.56
Shares Outstanding (Basic)649.48M
Shares Outstanding (Diluted)1.20B

Key Highlights

  • 1Total Assets Under Management (AUM) reached a record $367 billion, a 9% increase year-over-year.
  • 2Fee-Earning Assets Under Management (FEAUM) grew 13% to $277 billion, driven by strong fundraising across all segments.
  • 3Blackstone deployed $23 billion in capital during 2016, part of its three largest years for capital deployment in history.
  • 4New initiatives like Tactical Opportunities, core+ Real Estate, and Strategic Partners contributed 30% of total capital deployed in 2016, investing an aggregate of $7 billion.
  • 5The company distributed over $8 billion in value to common and Holdings unitholders over the past three years.
  • 6Blackstone maintained an A+ / A+ credit rating from S&P and Fitch, positioning it as the highest-rated alternative asset manager.
  • 7Total revenues increased by 10% to $5.1 billion, primarily driven by a 21% increase in Performance Fees and a 74% increase in Investment Income.

Frequently Asked Questions

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.

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.

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.

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.

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.