NEW YORK (BLOOMBERG) – Blackstone Group is doubling down on a post-Covid 19 economic recovery, investing heavily in businesses that will benefit from a world that’s gradually reopening.
New York-based Blackstone invested US$17.7 billion in the first three months of the year, buying hotels including Extended Stay America, private-jet operator Signature Aviation and UK travel company Bourne Leisure. Investors continued to bet solidly on Blackstone, which saw its assets under management swell to a record US$648.8 billion, the company said on Thursday in an earnings report.
Even as credit markets recovered and the stock market kept soaring, travel- and entertainment-related assets were struggling as people continued social distancing and local restrictions limited capacity at hotels and other venues. Blackstone says the firm is now seeing signs across its portfolio of companies that people’s behaviour is shifting: At the Cosmopolitan hotel of Las Vegas, money going into slot machines was at record levels. Forward bookings for travel in the UK were also at a high.
“This should be good time for the real world,” Blackstone President Jonathan Gray said in an interview. “Businesses like telemedicine and e-commerce will continue to do well but the pendulum is swinging back with a bunch of us getting out there again. It feels to me like this economic dam is starting to break.”
The firm continued adding to its war chest, which is now armed with US$149 billion in perpetual capital or long-term money. Investments in mental-health business Ginger and real estate logistics assets of Singapore’s GLP showed Blackstone’s ongoing bet on growth- and technology-focused companies.
“We’re trying to be as thematic as possible in deploying capital,” Gray said Thursday in a separate interview with Bloomberg Television. “In an environment where the economy is being transformed by technology, how can you see the best neighbourhoods, the areas that will benefit from what’s happening.”
Among earnings highlights: Funds posted gains across the firm’s segments last quarter, with private equity and tactical opportunities vehicles up more than 15 per cent.
Fee-earning assets rose 14 per cent from a year earlier while perpetual capital increased 47 percent.
Last quarter’s inflows were US$31.6 billion. The credit and insurance sector took in the most cash, followed by real estate in the first quarter.