Ok so no one actually replied you on this. I can help out on this because I'm practically in the industry and Blackstone just so happen to be my competitor.
Blackstone is a giant asset manager that specializes in private equity investments - this means buying private companies or if listed, privatize.
You will never know if they've had no losses unless you actually know people who:
1. Work in Blackstone
2. Work in any of the LPs that invested in their funds and have visibility on their reporting
3. Work in any of their portfolio companies that went bust
Blackstone is public listed (BX) but their private funds are a blackhole to the BX unitholders. Their funds' true returns aren't published publicly as they're not legally required to. Psst: if you're resourceful enough, you can find out their Funds' returns, just takes some digging.
So for real estate, it's called PERE in industry parlance: private equity real estate. The high returns they get is due to numerous factors that we as individual investors can't easily achieve:
1. Leverage - They can get preferred lending rates due to their name alone, along with attractive LTV ratios (depends on their mandate tho). And that's just at the asset level (property). At the Fund level, they can still get a working capital/subscription line to further improve IRR, and those lines have pretty low lending rates, ~south of 2%. We can't get these.
2. Tax - In the industry, we have the Big 4 on speed dial and our in-house counsels to help us with any tax changes globally. We always structure our investments for maximum tax efficiency. Individual investors like you and I aren't able to get such treatment unless you have access to a private bank along with a strong corp fin team to help you with tax structuring. The cost to structure the investment itself may put you off.
3. Access - They have wide and deep connections with brokers and other players in general. Their deal teams are strong and they do not have to rely on public deals (EOIs, etc.) - they can do multiple off-market deals. An individual investor can't do that unless you're part of the industry yourself. Few years back when the European banks were shedding their loan books to prepare for Basel III capital requirements, several hedge and PE funds swooped in and gobbled up their books, of which held multiple real estate assets in the PIGS markets. The market recovered fiercely (esp. in Spain), a few of those astute players got huge returns, and their deal teams pocketing million dollar bonuses each. Again, inaccessible for the layman.
4. Risk - Many of Blackstone's PERE Funds have an Opportunistic focus. So in terms of real estate investments, there are only four types of strategies:
(i) Core - Low risk, low return. Basically buying already-built, fully-leased buildings in strong markets at low leverage (30-40%). REITs are concentrated in this market. That's why many of their properties often yield <6%.
(ii) Core plus - Medium risk, medium return. Basically core strategy, but with added leverage. Core plus deals can see LTVs north of 50%.
(iii) Value-add - Mid/high risk, mid/high return. This is what I'm doing. Buying a sh1tty property, turning it around and selling it. Basically, we find properties that are in good locations but are mismanaged or is under-rented, then we spruce it up with AEI, change the tenant mix, and then flip it to core/core plus buyers.
(iv) Opportunistic - High risk, high return. This is what property developers (and Blackstone) do: buying up empty land and building something, then selling it. This can also involve a debt-fund, where you invest in the other side of the capital structure. There are a few mezz debt funds out there, Blackstone has a few. Leverage here is at it's highest, north of 60% easily. That's where you get the juiced up returns - but then again, if it goes wrong, it can wreck your Fund's returns. There are plenty of cases of blow-ups but you don't hear it because real estate is a private market unlike the stocks you see on SGX. This is where Blackstone is, that's why you see the high returns.
I could go on and on but this is just a quick overview on PERE. It has close to no bearing on layman real estate investing. The average layman probably invests in a HDB shophouse, or another Condo unit, and that's it. PERE funds buy whole portfolios of office buildings, with a GAV of S$500m each? Very different ballgame.
. This is true across forums and analyst recommendations. Many fail to realise its not easy to play the "pump and dump" characteristics of the Chinese market. Sentiment changes very rapidly.