Blackstone Group Chairman and CEO Steve Schwarzman is not bashful. In his remarks to shareholders on the first quarter 2015 earnings report conference call, he noted that “Our limited partners view Blackstone as the gold standard in the high-return asset management industry.” He went on to praise the culture at Blackstone for its “dedication to excellence” and say that “we believe our long-term prospects are exceptionally strong.”
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Blackstone is six times tougher to get into than Harvard
Schwarzman also noted that Blackstone has been chosen as the best place to work in the asset management industry for the second consecutive year. He also pointed out that the firm had more than 15,000 applications for 100 analyst positions in 2014, which means "it's six times harder to get a job as an analyst at Blackstone than to get into into Harvard, Yale or Stanford".
Recent Blackstone performance
Laurance Tosi, Blackstone Group's CEO, commented on the firm's financial results on the call. He noted that the firm's PE companies are increasing revenues 6% and EBITDA 9% on average, which is more than double the revenue and four times the EBITDA growth of the S&P 500. The real estate portfolio, in terms of occupancy, rate, and earnings, has improved and is in "the upper range of relevant market measures."
Of note, both private equity and real estate public holdings ($31 billion) soared more than 15% in the first quarter. Tosi also highlights that total returns for private equity and real estate, which were each up more than 20% over the last year, almost double the total return of the S&P 500 index.
He also pointed out that Blackstone's hedge funds and credit funds also out-performed their relevant indices. Tosi did note that "both of those businesses are down slightly on a lower rate of appreciation this quarter, very strong in-flows, positive returns, and new products position them well for the rest of the year."
In addition, all of Blackstone's businesses had double-digit gross in-flows over the last year, adding up to $77 billion.
Moreover, the quote asset base of Blackstone totaled over $100 billion over the last four quarters, well above the record $34 billion of fee-paying capital returned to investors during the same period. He also highlighted that the firm has "seen unprecedented demand for every segment of Blackstone, leading to the $30 billion of capital raised in the first quarter alone that Steve mentioned."
Tosi summarized Blackstone's remarkable growth over the last few years. The firm has seen its assets grow a robust 50%, from $205 billion to $310 billion since Sept. 2012. During this period, ENI has grown 150%, and distributable earnings are up 550%. Last but not least, Blackstone also returned $124 billion to investors, "proving that higher returns and realizations are positively correlated to investor demand and strong in-flows."
H/T Devin Banerjee