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Stephen A Schwarzman, chairman and chief executive officer, Blackstone

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Blackstone reports ENI of USD1.4bn in 2010

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Blackstone Group’s Economic Net Income (ENI) was USD1.4 billion for the full year 2010, an increase of USD714.5 million compared to ENI for the full year 2009, according to the group’s full year 2010 results.

The increase in ENI was driven principally by strong performance across the investment segments, which produced USD1.5 billion in Performance Fees and Investment Income, up from USD273.6 million for the full year 2009. That strong performance continued through the fourth quarter where ENI was USD512.7 million, up 56% from USD329.4 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 USD109.5 billion and USD128.1 billion, respectively, driven both by net inflows and market appreciation. Blackstone committed nearly USD10 billion in new investments across its diverse investment businesses in 2010 and had USD30 billion of committed but uninvested capital or, “dry powder”, at the end of 2010.

For the full year 2010, Total Segment Revenues were USD3.1 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 USD548.5 million, up from USD33.4 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 USD1.6 billion for the full year 2010, an increase from USD1.1 billion for the full year 2009, driven largely by increased accruals for Performance Fee Compensation of USD357.0 million for the full year.

Compensation, excluding Performance Fee Compensation, was up 12% to USD859.1 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 USD442.3 million for the full year 2010, up from USD410.4 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 USD3.1 billion, compared to USD1.8 billion for the full year 2009, and Net Income (Loss) Attributable to The Blackstone Group L.P. of USD(370.0) million, compared to a net loss of USD715.3 million for the full year 2009. GAAP results for the fourth quarter of 2010 included Revenues of USD1.1 billion, compared to USD725.3 million for the fourth quarter of 2009, and Net Income (Loss) Attributable to The Blackstone Group L.P. of USD(11.0) million, compared to a net loss of USD143.3 million for the fourth quarter of 2009.

Stephen A Schwarzman (pictured), Chairman and Chief Executive Officer, says: “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 USD18 billion in new capital. These inflows, combined with rising asset values, helped drive total assets under management to USD128.1 billion as of year-end, up from USD98.2 billion as of year-end 2009.”

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