Blackstone Inc. Quarterly Report for Q1 Ended Mar 31, 2020

Summary

Blackstone Inc. reported a significant decline in its financial performance for the first quarter of 2020, primarily driven by the adverse economic impacts of the COVID-19 pandemic and a dislocation in energy markets. Total revenues decreased by approximately $5.1 billion year-over-year to a negative $3.1 billion, largely due to a substantial drop in Investment Income (Loss), which fell by $5.3 billion. This decline was primarily attributed to unrealized losses across its Private Equity and Real Estate segments, reflecting the widespread market downturn. Despite the revenue hit, Blackstone managed to control expenses, with total expenses decreasing by $1.7 billion year-over-year to $638.1 million. This reduction was largely driven by a significant decrease in Performance Allocations Compensation, which is tied to investment performance. The company ended the quarter with total assets of $26.9 billion and total liabilities of $15.4 billion, resulting in total equity of $11.5 billion. The firm maintained a strong liquidity position with $2.1 billion in cash and cash equivalents, and had no outstanding borrowings under its revolving credit facility at the end of the period.

Key Highlights

• 1Total Revenues decreased by 51% to a net loss of $3.1 billion for Q1 2020, primarily due to a $5.3 billion decrease in Investment Income (Loss) driven by unrealized losses.
• 2Investment Income (Loss) declined significantly by $5.3 billion, reflecting the broad market downturn caused by COVID-19, with notable negative impacts in Private Equity and Real Estate.
• 3Total Expenses decreased by 63% to $638.1 million, largely due to a $1.7 billion reduction in Compensation and Benefits, primarily Performance Allocations Compensation, which correlated with lower investment income.
• 4Fee Related Earnings increased by 47% to $267.5 million for the Real Estate segment and by 4% to $114.8 million for the Private Equity segment, indicating resilience in recurring fee-based revenues.
• 5Assets Under Management (AUM) decreased by $33.1 billion to $538.0 billion, primarily due to market depreciation of $47.1 billion, partially offset by inflows and other activities.
• 6Blackstone maintained a strong liquidity position with $2.1 billion in cash and cash equivalents and $1.7 billion in corporate treasury investments as of March 31, 2020.
• 7The company repurchased $253.5 million of its Class A common stock during the quarter under its $1.0 billion repurchase program.

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