Rise in Blackstone's Profits by 25% as Assets Under Management (AUM) Reach an Impressive $1.2 Trillion
In a significant move, global investment firm Blackstone and British insurer Legal & General (L&G) have announced a long-term strategic partnership. This collaboration aims to enhance L&G’s competitive advantage in annuities and expand its asset management capabilities globally.
Key Details
The partnership will see L&G’s £92 billion ($122.5 billion) annuities business leverage Blackstone’s private credit origination platform to access a diversified pipeline of predominantly US-based, investment-grade assets. L&G will invest up to 10% of anticipated new business flows in annuities through Blackstone’s platform. This access is expected to bolster returns, support growth ambitions, and complement L&G’s existing asset origination capabilities.
For L&G’s asset management arm, managing approximately £1.1 trillion ($1.4 trillion) in assets, the collaboration will enable the development of innovative public/private hybrid credit solutions. These solutions combine Blackstone’s leading private credit expertise with L&G’s active fixed income capabilities, with the aim of accelerating L&G’s ambitions to broaden its presence in global wealth and wholesale investment channels.
The deal unites L&G’s strong positions in pension risk transfer—backed by its substantial annuities book—and Blackstone’s significant credit platform, which manages about $465 billion in credit assets and $237 billion in third-party insurance assets. This partnership supports L&G in maintaining and strengthening its market-leading position in pension risk transfer and responding to growing demand for hybrid investment products combining public and private credit.
António Simões, Group CEO of L&G, highlighted that the partnership is a crucial step towards focused, sustainable growth and enhanced shareholder returns, complementing L&G’s insurance, investment, and asset origination operations.
Financial Highlights
Blackstone’s total assets under management have increased to around $1.2 trillion, following inflows of $52.1 billion in the second quarter of this year. The company reported a 25% increase in distributable profits for the second quarter, amounting to $1.57 billion ($1.21 a share). This increase was a result of increased net flows in the second quarter.
The partnership with L&G is not expected to have a material impact on Blackstone’s distributable profits or total distributable earnings for the second quarter. However, the increased net flows contributed to a 13% increase in management fees for the company.
Blackstone reported private credit gross returns for the quarter at 3% (2.2% net), and total revenues for the second quarter increased to $3.71 billion, up from $2.8 billion over the same period last year. The returns were from the flagship commingled funds across opportunistic lending, global middle market direct lending funds, stressed/distressed strategies, and non-investment grade infrastructure and asset-based credit strategies.
In conclusion, this strategic partnership merges Blackstone’s extensive private credit platform with L&G’s significant annuities business and asset management strength to create innovative investment solutions, improve returns, and facilitate L&G’s growth in key markets.
Businesses Blackstone and Legal & General (L&G) are investing in a strategic partnership to enhance L&G's competitive advantage in annuities and expand its asset management capabilities globally. This collaboration will leverage Blackstone's private credit origination platform to access a diversified pipeline of investment-grade assets, with L&G investing up to 10% of anticipated new business flows in annuities through Blackstone's platform.
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