Blackstone Chairman, CEO, and Co-Founder Stephen A. Schwarzman today sent a letter to BX shareholders on the 10-year anniversary of Blackstone’s 2007 initial public offering (IPO).
The letter outlines the significant growth and evolution Blackstone has experienced over the course of the last decade – assets under management have quadrupled and the firm has added several, innovative new business lines – while still maintaining its partnership culture, entrepreneurial spirit, and sharp focus on investment performance.
Since the IPO, Blackstone has paid out nearly $14 per share in value to its shareholders, and about $7.50 per share over the last three years alone, including the value of the PJT spin off. An investor who bought BX common shares in our IPO and reinvested the substantial distributions they received would have nearly doubled their money.
The full text of the letter is available below.
To our shareholders:
This week marks the 10-year anniversary of our IPO. So much has happened – in global markets and at Blackstone alike – since then, and it’s worth taking a moment as we reach this milestone to reflect on how far we’ve come and what’s ahead.
Blackstone has evolved in ways that I couldn’t have even begun to imagine at the time of our IPO, let alone when I co-founded the firm more than thirty years ago. Despite an often uncertain environment – including the worst financial crisis since the Great Depression – Blackstone achieved phenomenal growth and success on behalf of our investors, quadrupling our assets under management over the last decade. In fact, three of our business segments – Private Equity, Real Estate, and GSO – are each larger than the entire firm’s AUM in 2007.
We’ve also nearly doubled our employee base and number of offices worldwide since the IPO, while still maintaining our partnership culture, entrepreneurial spirit, and sharp focus on investment performance. Perhaps now more than ever, limited partner investors depend on us to help them achieve the returns their beneficiaries – including tens of millions of pensioners – need. Since inception, our flagship funds have generated significant outperformance versus public market indices.
The reach and breadth of the firm today is nothing short of astonishing. Blackstone is by far the largest manager of alternative assets in the world, with a market cap almost equal to all of our public peers combined. The permanent capital raised in the IPO enabled us to fund our ideas and expand into new markets and asset classes, including through acquisitions like GSO and Strategic Partners, all the while attracting the best talent in the industry. Our IPO also made possible our A+ debt rating, which we’ve used to bolster our balance sheet and raise further capital for growth.
Today, we are one of the largest owners of real estate globally and have built a substantial real estate credit platform. Our portfolio of 81 companies in private equity employs more than half a million people worldwide. We are the largest allocator to hedge funds in the industry – double our nearest competitor. Our credit platform is a clear stand-out in its space as the largest global CLO issuer for four years running. We have broadened our investor base through Private Wealth Solutions – 15-20% of our AUM now comes from retail channels. And our Tactical Opportunities and Strategic Partners businesses are two of the fastest-growing major alternative strategies anywhere. And we’re just getting started on our next significant opportunity in infrastructure.
But there are no patents in finance. We have repeatedly identified new adjacencies to generate great returns for our investors and transformed those opportunities into leading platforms of significant scale. Today, more than half of our AUM comes from new businesses established or acquired since the IPO, including GSO, Tactical Opportunities, Real Estate debt strategies, our longer-dated Core Private Equity and Core-Plus Real Estate strategies, and our Strategic Partners secondaries business. Our strong record reinforces the power of the Blackstone brand as we continue to build our franchise.
This success has translated into compelling returns for our shareholders. Since the IPO, we've paid out nearly $14 per share in value, and about $7.50 per share over the last three years alone, including the value of the PJT spin off. An investor who bought BX common shares in our IPO and reinvested the substantial distributions they received would have nearly doubled their money. And we have a very long runway ahead of us. Against a backdrop of powerful secular growth for alternatives, the outlook for value creation and cash distributions to shareholders is extremely strong.
As always, I take none of this for granted. Investors are not obligated to entrust us with their money. Blackstone is about the common mission that our people share to be the very best in the world, and we will never sacrifice our reputation or integrity for short-term gains. I’m energized by the tremendous opportunities that lie ahead, and look forward to what the next decade and beyond has in store for us.
We thank you for your continued support.