Blackstone becomes first private equity firm to reach THIS $1 trillion milestone

New York-based private equity firm Blackstone has breached the $1 trillion in assets under management mark- becoming the first among its peers to reach the milestone. The firm first set the goal of crossing the $1 trillion landmark in 2018 by 2026 but reached it, three years in advance.

The company's assets rose to the trillion mark in the second quarter from $991.3 billion at the end of the first quarter. The move was made possible due to over $30 billion in inflows coming frominsurance, infrastructure, credit and certain types of real estate.

Overall, Blackstone’s market capitalisation currently stands at nearly $132 billion, compared with about $113 billion for BlackRock.

The nearest rival of Blackstone when it comes to assets remains Apollo, known for its insurance business. At the end of the first quarter, Apollo had$600 billion in assets under management with the company setting a goal of reaching the $1 trillion mark by 2026.

Mantra for success

The company was started in 1985 byco-foundersPeter G. Peterson and Stephen A. Schwarzman with a modest seed capital of $400,000. The transformation to a trillion-dollar empire is being regarded as one of the most dramatic transformations in modern markets. Experts argue that Blackstone's success can be narrowed down to the company's vision of diversifying its business routinely.

“We started with one private equity fund,” Schwarzman, Blackstone’s billionaire co-founder, said this year. “Now we do 60 different things.”

In his memoir,Schwarzman reflects on the mantra that has driven his company to insane heights.

"If you’re going to commit yourself to something, it’s as easy to do something big as it is to do something small,”wrote Schwarzman. “I only have so much time and so much energy. I always look for something that has almost limitless possibilities because I know that that itself is worthy.”

As one of the first firms to reach the $1 trillion landmark, Blackrock's dealmakers continue to influence the daily lives of Americans. Having a seat in most major companies, Blackstone shapes firms that determine how US citizens secure a house, find romance in their neighbourhood and access the lights in their homes.

Manoeuvring the 2008 financial crisis

In the aftermath of 'The Great Recession of 2008', Blackrock emerged stronger than ever by snapping up debt-investing firm GSO Capital Partners. Itallowed the company to become a major source of financing in the country while banks, shackled by strict regulations, failed to have a lift-off.

Additionally, the company's bets on real estate prior to the financial crisis, although risky, managed to pay off big time, unlike the banks. So when the interest rates fell to historic lows, the firm capitalised on cheap debt and shopped for deals.

(With inputs from agencies)

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