Blackstone Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; comparisons are primarily with FY2020. The filing is an annual report, not a standalone Q4 report. Blackstone manages alternative investment strategies across real estate, private equity, hedge fund solutions, and credit and insurance.
Key financial results
| Metric | FY2021 | FY2020 | Change |
|---|---|---|---|
| Total revenue (GAAP) | $22.58 billion | $6.10 billion | +270% |
| Net income attributable to Blackstone Inc. | $5.86 billion | $1.05 billion | +460% |
| Diluted earnings per share | $8.13 | $1.50 | Up from prior year |
| Distributable Earnings (non-GAAP) | $6.17 billion | $3.34 billion | +85% |
| Operating cash flow | $3.99 billion | $1.94 billion | +106% |
| Total Assets Under Management | $880.9 billion | $618.6 billion | +42% |
| Fee-Earning Assets Under Management | $650.0 billion | $469.4 billion | +38% |
GAAP revenue growth primarily reflected a sharp swing in investment income: total investment income was $16.79 billion, including $8.68 billion of unrealized performance allocations, versus an unrealized performance-allocation loss of $384 million in 2020. Realized performance allocations rose 168% to $5.65 billion. Management and advisory fees, net, increased 26% to $5.17 billion. Total expenses were $9.48 billion, including $6.09 billion of realized and unrealized performance-allocation compensation. The effective income tax rate was 8.7%, down from 13.6%.
Cash and cash equivalents were $2.12 billion at year-end. The company also reported $658 million in corporate treasury investments and $3.26 billion in other investments, including $727 million of liquid investments. Balance-sheet loans payable were $7.75 billion; outstanding senior-note principal was approximately $7.61 billion, and $250 million was drawn on a $2.25 billion revolver at year-end. The revolver borrowing was repaid January 14, 2022. FY2021 cash used in financing was $3.78 billion, including $4.60 billion of dividends and distributions; cash increased by $135 million, including cash held by funds.
Blackstone reported $6.96 billion of total Segment Distributable Earnings, a non-GAAP measure. Segment results: Real Estate $3.22 billion, Private Equity $2.53 billion, Hedge Fund Solutions $668 million, and Credit & Insurance $541 million. Adjusted EBITDA, also non-GAAP, was $7.18 billion.
Material changes and notable items
- Segment Distributable Earnings rose 89% to $6.96 billion. Strong realizations and market appreciation benefited results across businesses; Real Estate and Private Equity were the largest contributors.
- Perpetual Capital AUM increased 132% to $313.4 billion, supported by insurance relationships, BREIT, and direct lending, including the launch of BCRED.
- On November 2, 2021, Blackstone acquired a 9.9% stake in AIG’s Life and Retirement business and agreed to become its exclusive external investment manager for certain asset classes. It also issued $2.0 billion of senior notes in August. A further $1.5 billion of notes was issued in January 2022.
- Blackstone recognized gains tied to P\u00e1tria share-sale transactions in 2021. Strategic Partners changed its reporting process in September; FY2021 results include five quarters of its economic and market activity, affecting reported appreciation and comparability.
- The company repurchased 10.3 million shares for $1.2 billion during 2021. Its board authorized up to $2.0 billion of share and partnership-unit repurchases in December.
Outlook, risks, and contingencies
Management provided no quarterly or annual earnings guidance. It described a strong 2021 recovery but highlighted inflation, wage and input-cost pressures, supply-chain disruption, COVID-19 variants, market volatility, and expected interest-rate increases in 2022. Higher rates could weigh on asset valuations, financing costs, investment exits, and portfolio-company margins. Management noted that much of the Credit & Insurance debt portfolio is floating-rate or short-duration, which it views as providing some insulation.
Results and cash flow are inherently volatile because performance revenues depend on fund investment marks and realizations; unrealized gains may not be realized. Net Accrued Performance Revenues were $8.74 billion at year-end, a potential future revenue indicator rather than cash received. Recorded clawback obligations were $88.7 million. In an extreme scenario in which all carry-fund investments became worthless, the filing estimates $4.9 billion of potential after-tax clawback exposure, with Blackstone Holdings potentially liable for $4.5 billion if personnel default on their portions; management considers this scenario remote. Other key risks include valuation judgment, leverage and counterparty exposure, fundraising competition, regulation, cybersecurity, conflicts of interest, and ESG and climate-related scrutiny.
The filing reports ongoing Kentucky-related litigation involving Blackstone Alternative Asset Management and other parties; Blackstone says no pending legal proceeding is currently expected to materially affect its consolidated financial statements, while acknowledging adverse outcomes could affect a particular period. The independent auditor issued unqualified opinions on the financial statements and internal control over financial reporting; management also concluded controls were effective.
Most important facts for investors to verify
- How much of 2021’s earnings growth came from realized cash proceeds versus unrealized investment appreciation, and how those marks subsequently performed.
- The sustainability of fee growth and the pace, terms, and redemption profile of AUM inflows—particularly in perpetual-capital and insurance channels.
- Current leverage, liquidity after the January 2022 note issuance and revolver repayment, and funding needs for remaining commitments and tax-receivable-agreement payments.
- Potential clawback exposure, including the assumptions underlying fund valuations and the extent to which personnel-funded escrow can cover obligations.
- The effect of the Strategic Partners five-quarter reporting transition on year-over-year performance comparisons and reported AUM appreciation.
- Dividend variability: Blackstone intends to distribute approximately 85% of its share of Distributable Earnings, but dividends remain at the board’s discretion and are not guaranteed.