Blackstone assets rise 1.7% for quarter, 8.3% for year partly due to inflows

Blackstone on Thursday reported $991.3 billion in assets under management as of March 31, a 1.7% increase from three months earlier and up 8.3% from a year earlier.

Part of the increase was attributed to inflows of $40.4 billion in the first quarter, declining from $43.1 billion in the fourth quarter and $50 billion of inflows in the first quarter of 2022.

The alternative investment firm's first-quarter results highlighted Blackstone's "exceptional strength and stability" despite a challenging investment environment, said Stephen A. Schwarzman, Blackstone chairman, CEO and co-founder, during Thursday's earnings call.

Mr. Schwarzman said the vast majority of the nearly 90 funds Blackstone launched in its history generated gains for its investors despite some adverse conditions.

Jonathan Gray, Blackstone's president and chief operating officer, acknowledged on the earnings call that the fundraising environment has become more challenging. But he added that Blackstone did raise scalable capital.

Mr. Gray highlighted the closing of the firm's global real estate flagship fund with $30.4 billion and said Blackstone is currently raising a European opportunistic strategy that is aiming to raise the same amount as its predecessor fund — $9.5 billion.

Blackstone invested $10.8 billion in the first quarter, down from $18.7 billion deployed in the fourth quarter and $22.8 billion in the first quarter of 2022. Realizations were $18 billion in the first quarter, up from $13.5 billion in the prior quarter but down $23.2 billion in the year-earlier quarter.

While realizations are challenging, Michael S. Chae, senior managing director and chief financial officer, said on the earnings call that Blackstone is creating value while its executives wait for market conditions to improve.

Mr. Gray said that in real estate "where you invest matters" and that Blackstone's $331.8 billion real estate business, its largest by AUM, was underexposed to the underperforming office and retail sectors and concentrated in outperforming sectors such as industrial. Even so, gross returns for its opportunistic real estate funds and strategies were -0.4% in the first quarter and -4.1% for the year ended March 31. Its core-plus real estate vehicles, which includes Blackstone Real Estate Income Trust, or BREIT, returned -1.6% for the first quarter but posted a 1.4% return for the 12 months ended March 31.