Blackstone has posted reductions in its earnings on the back of declines in its real estate investments last year.
The fall comes as the firm recorded a 3% rise in assets under management within its real estate portfolio to $336.9bn (£265bn), representing roughly a third of the firm’s overall $1tn AUM.
Overall distributable earnings at the private equity giant dropped by 24% in 2023, to $5.1bn.
The firm’s opportunistic property funds posted a 3.8% decrease in investment performance in Q4, along with a 6.3% fall during the full year. The core-plus strategies were also marked down, by 4.6% during the quarter and by 4.3% for the year.
Distributable earnings from the real estate segment plunged by 47% year-on-year to around $2.3bn during 2023. The division’s fee-related earnings for the year declined by 9% to $2.1bn.
However, distributable earnings during Q4 alone were up by 2% to $525m when compared with the same quarter last year, signalling some recovery. Fee-related earnings in Q4 stayed mostly static at $473m.
The real estate arm recorded inflows of $19.9bn in the fourth quarter, and $53.9bn for the year. Some $15bn was deployed during the year.
The firm sold $18.7bn of real estate during the year, $4.6bn of which was offloaded in the last quarter. Sales included BREIT’s partial sale of Bellagio (pictured), Las Vegas, for $933m.
Blackstone had $197.3bn of dry powder at the end of Q4, with $65.2bn allocated to real estate.
Chairman and chief executive Stephen Schwarzman said: “Blackstone reported strong fourth-quarter results, as we exited a volatile year for global markets. The quarter reflected strong momentum across the business, including a meaningful acceleration in fund-raising and investment activity. We are exceptionally well positioned for the road ahead with nearly $200bn of dry powder capital to invest.”
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