Blackstone's real estate, for superior sector and asset selection led to flagship strategies, appreciating 8% to 10% vs. a 4% decline in the REIT index.
Blackstone 1Q22 Takeaways
- "As we've grown larger, we have not sacrificed returns. Quite the opposite, in fact. In 1Q22, while nearly every major asset class outside commodities declined, our funds delivered strong performance. This is best highlighted by our real estate business, our largest business, for superior sector and asset selection led to our flagship strategies, appreciating 8% to 10% vs. a 4% decline in the REIT index."
- "Over the past 3 years, our LPs have entrusted us with $500B of inflows, which is greater than the total AUM of any other alternatives firm. Inflows reached $50B in 1Q22 alone and $289B LTM."
- "Across our nearly $300B real estate business, approximately 80% of the equity portfolio in sectors where US rents are growing significantly in excess of the rate of inflation, owning hard assets has historically provided a strong hedge for inflation."
- "Logistics is our largest investment team comprising 40% of the global CRE portfolio. We first started investing in this sector at scale in 2010 given the expected explosion in e-commerce. And today, we own approximately $170B of warehouses. We're now seeing a surge in corporation's increasing inventory holdings to mitigate supply chain issues."
- "Investors recognize our products are well positioned for the inflationary environment ahead given BREIT's focus on hard assets with short-duration leases, while BCRED is a floating rate vehicle with an average LTV of 43%. BREIT more than doubled yoy to $63B, generating 5.8% appreciation in 1Q22"
- "Have to assume that we're in a higher inflationary environment and rates will move higher. If you can own businesses where cash flows can reset higher and outrun that inflation, you can still deliver positive performance. That's what we've been doing. That's what we'll continue to do."
- "If you look at the big deals that we've done since the beginning of the year, be it the casino deal in Australia, last-mile logistics in Europe, transportation infrastructure in Europe, student housing this week in the U.S., they all fall into that bucket. We're mindful of not owning fixed income-oriented assets or businesses without pricing power and exposure to input costs."