Blackstone sees growth in private credit funds in fourth quarter
Blackstone’s private credit portfolio saw the strongest growth of all segments in the fourth quarter of 2023, as the investment giant continues to tap into the popular asset class.
The firm’s financial results showed 3.9 per cent growth in the value of its private credit funds over the last three months of the year, bringing the full-year performance to 16.4 per cent.
In contrast, Blackstone’s real estate division lost value. Opportunistic real estate lost 3.8 per cent in the fourth quarter, bringing the full-year decline to 6.3 per cent.
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BCRED – Blackstone’s private credit fund – saw 10 per cent total net returns last year, with more than $64bn in assets under management.
BXSL, Blackstone’s secured lending fund, returned 11 per cent and manages more than $11.2bn.
The $1.5trn private credit market is booming as investors clamour to scoop up high-yielding deals in a high-interest-rate environment. Preqin has predicted that it is set to grow to $2.8trn by 2028.
Blackstone’s overall distributable earnings – which are used to pay dividends to shareholders – rose to more than $1.38bn, a four per cent year-on-year increase.
Blackstone’s profit from asset sales increased by 16 per cent to $424.8m, despite challenging macroeconomic conditions making it harder for firms to cash out their investments.
Total assets under management for the full year rose by seven per cent year-on-year to £1.040.2bn, with $52.7bn of inflows in the fourth quarter and $148.5bn for the year.
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“Blackstone reported strong fourth-quarter results, as we exited a volatile year for global markets,” said Steve Schwarzman, chairman and chief executive of Blackstone.
“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.”