Jan 27, 2022
Blackstone Dealmakers Doubled Pay to $1.6 Billion on Asset Sales
(Bloomberg) -- The good times keep rolling for executives at the world’s biggest alternative asset manager.
Blackstone Inc., which saw its share price double last year, paid out a record $1.6 billion in performance allocations to its dealmakers and executives in 2021. That comes during a year of record exits for the firm: Blackstone cashed out of $77 billion worth of investments during the period. The spoils will be shared among hundreds of senior dealmakers.
The cut of profits dealmakers took on realized deals in 2020 was $714.3 million, according to a company statement Thursday.
It’s a reminder of how the private equity industry continues to mint huge riches for employees. Surging valuations have allowed firms to sell holdings at sky-high prices while taking in record sums from investors. Pay has also been driven up across Wall Street as the war for talent has intensified.
“We have this long-term alignment, where our investment professionals benefit from rising incentive fees and performance fees,” Blackstone President Jon Gray said Thursday in a Bloomberg Television interview. “So when we deliver for our customers, their compensation goes up. Obviously in a year like 2021 that bodes well for our individuals.”
For official accounting purposes, the 2021 payout to dealmakers on realized deals was $2.3 billion, according to Thursday’s statement. By the same measure, compensation alone at the company rose about 15% to $2.16 billion -- an equivalent of $720,000 per employee at the roughly 3,100-person firm.
While outsized pay is nothing new in private equity, some recent awards are eye-popping even by the industry’s lofty standards. In the past couple of months, leaders at KKR & Co. and Apollo Global Management Inc. were given packages that could reach close to $1 billion for each executive.
Blackstone co-founder Steve Schwarzman, who is worth $33.4 billion, is the 38th richest person in the world, according to the Bloomberg Billionaires Index.
New York-based Blackstone on Thursday reported hauling in a record pile of new cash. The haul drove its distributable earnings to a record $2.3 billion, up 55% from a year earlier.
The company’s stock was up 6.9% at 3:16 p.m. in New York on Thursday.
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