Stephen A. Schwarzman Opalesque Industry Update – The Blackstone Group reported its 2010 results. Economic Net Income (“ENI”) was $1.4 billion for the full year 2010, an increase of $714.5 million compared to ENI for the full year 2009, more than double that of the prior year. The increase in ENI was driven principally by strong performance across the investment segments which produced $1.5 billion in Performance Fees and Investment Income, up from $273.6 million for the full year 2009. That strong performance continued through the fourth quarter where ENI was $512.7 million, up 56% from $329.4 million earned in the fourth quarter of 2009.
Blackstone’s Fee-Earning Assets Under Management and Total Assets Under Management showed strong growth, rising to a record $109.5 billion and $128.1 billion, respectively, driven both by net inflows and market appreciation. Blackstone committed nearly $10 billion in new investments across its diverse investment businesses in 2010 and had $30 billion of committed but uninvested capital or, “dry powder”, at the end of 2010.
For the full year 2010, Total Segment Revenues were $3.1 billion, up 75% from 2009. The increase was driven by higher Performance Fees in the Real Estate and Credit and Marketable Alternatives segments and a sharp increase in Investment Income to $548.5 million, up from $33.4 million in the prior year due to increases in the carrying value of Blackstone’s capital invested in its own funds, particularly in the Real Estate and Private Equity segments. Total Segment Expenses were $1.6 billion for the full year 2010, an increase from $1.1 billion for the full year 2009, driven largely by increased accruals for Performance Fee Compensation of $357.0 million for the full year. Compensation, excluding Performance Fee Compensation, was up 12% to $859.1 million.
Blackstone’s non-compensation expenses were up 15% from full year 2009 driven mostly by fundraising and financing activities. Without these activities, non-compensation expenses were up 2%, reflecting Blackstone’s ongoing expense discipline and focus on operating leverage. Net Fee Related Earnings from Operations were $442.3 million for the full year 2010, up from $410.4 million for the full year 2009. Net Fee Related Earnings from Operations for the full year increased principally as a result of increased Management and Advisory Fees which were up 10% year over year.
GAAP results for the year ended December 31, 2010 included Revenues of $3.1 billion, compared to $1.8 billion for the full year 2009, and Net Income (Loss) Attributable to The Blackstone Group L.P. of $(370.0) million, compared to a net loss of $715.3 million for the full year 2009. GAAP results for the fourth quarter of 2010 included Revenues of $1.1 billion, compared to $725.3 million for the fourth quarter of 2009, and Net Income (Loss) Attributable to The Blackstone Group L.P. of $(11.0) million, compared to a net loss of $143.3 million for the fourth quarter of 2009.
Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, “Blackstone exited 2010 in a stronger position than ever before, with all of our businesses experiencing higher levels of activity. The carrying values of our investment funds continued to increase sharply, driving our best quarterly earnings result in nearly four years. In 2010, we continued to provide our limited partner investors with best-inclass returns across all of our businesses, and our LPs entrusted us with nearly $18 billion in new capital.These inflows, combined with rising asset values, helped drive total assets under management to $128.1 billion as of year-end, up from $98.2 billion as of year-end 2009.” Full press release: