Blackstone's assets under management hit a record $950.9 billion as of Sept. 30, a 1.1% increase over June 30 and up 30% from $730.7 billion year over year, the alternative investment manager reported Thursday.
"The third quarter of 2022 was a continuation of one of the most difficult periods for markets in decades," said Stephen A. Schwarzman, Blackstone's chairman and CEO, during an earnings call.
"While most money managers focusing on liquid markets have seen declining AUM, we've continued to grow," Mr. Schwarzman said.
Part of Blackstone's success is that the firm has protected investor capital in periods of market declines, he said.
"Historically, we have taken advantage of pullbacks to deploy capital at attractive prices," he said.
Overall, Blackstone had $45 billion of inflows in the third quarter, down from $88 billion of inflows in the second quarter and down from $46.7 billion in the year-earlier quarter.
However, fewer transactions led to a drop in exits and less deployment of capital into deals. Blackstone net realizations were $402.6 million in the quarter, down 61% from $1 billion in the third quarter of 2021. Deployment was $31.3 billion in the third quarter, down 34.5% from $47.8 billion in the prior quarter and a 15.6% decline from $37.1 billion in the year-earlier quarter.
"In a moment of dislocation, it takes time for sellers' expectations to change," said Jonathan Gray, Blackstone's president and chief operating officer, during the same earnings call.
Not only do sellers pause, but lenders "move to the sidelines" and transaction activity slows, Mr. Gray said.
"I expect deployment will be muted," but that does not mean Blackstone executives will not find opportunities, he said.
"Until you get a little more certainty out there" and people become more confident that inflation is heading down and interest rates have hit their peak levels, there will be lower levels of transaction activity, Mr. Gray said.
