While changing market conditions take time to fully translate to our financial results, the fourth quarter reflected an acceleration in key forward indicators, including both fundraising and deployment We’re planting seeds and expanding invested capital in the ground. And with nearly $200 billion of dry powder, our purchasing power for investments exceeds almost any other company in the world. I believe that we will look back at 2023 as the cyclical bottom for our firm. Looking forward, Blackstone is exceptionally well positioned to navigate the road ahead. Our investors can count on the dedication of our people and the enduring nature of our culture, characterized by excellence, achievement, teamwork, hard work, and the highest standards of ethics and integrity.
Our employees embody these values, and they approach their work every day with a passion for what they do and an unwavering commitment to serving our clients. We created an environment in the firm that is defined by meritocracy and equality of opportunity. We do not discriminate against anyone based on race, ethnic background, religious beliefs, gender, or sexual orientation. We are proud of these values. Our people want to create and build their careers at Blackstone, and there was a huge demand to work at the firm. We had 62,000 unique applicants or 169 physicians in the latest analyst class, reflecting an acceptance rate of 0.271%, a dramatic change from when we started the firm 38 years ago, when, frankly, hardly anyone wanted to join us.
This provides the foundation for the next generation of remarkable talent and will drive our growth for the foreseeable future. Blackstone is an extraordinary place and our prospects are very strong. I’m highly enthusiastic about what we will accomplish for our shareholders in 2024. And with that, I’ll throw the ball over to Jon.
Jonathan Gray : I’m happy to catch it. Thank you, Steve. And good morning, everyone. I’m proud of how we’ve navigated the challenging markets of the past few years by focusing on the right sectors. We believe we’re now heading into a better environment, as Steve noted, with inflation and cost of capital headwinds moderating. This backdrop is leading to the emergence of three powerful dynamics across our business. First, we believe that real estate values are bottoming. Second, our momentum in the private wealth channel is building. And third, investment activity has picked up meaningfully across the firm, which is a key element of creating future value. I’ll discuss each of these dynamics in more detail. First, as I said, we believe values in commercial real estate are bottoming.
This doesn’t mean there won’t be more troubled real estate investments to come in the market, particularly in the office sector, which were set up during a period when borrowing costs were much lower. Nor does it mean we won’t see a slowing in fundamentals in certain sectors with excess near term supply. What it does mean is that the cost of capital appears to have peaked as borrowing spreads have begun to tighten and the Fed is no longer raising rates, but likely cutting them in 2024. Also, importantly, new construction starts have started to move down sharply in commercial real estate, which is quite positive for long term values. While it will take time, we can see the pillars of a real estate recovery coming into place. We are, of course, not waiting for the all-clear sign and believe the best investments are made during times of uncertainty.
We announced three major real estate transactions in the past few months, the $3.5 billion take-private of Tricon Residential, a partnership with Digital Realty to develop $7 billion of data centers, and a joint venture with the FDIC to acquire a 20% stake in a $17 billion first mortgage portfolio from the former Signature Bank. We think this is just the start as Blackstone Real Estate has $65 billion of dry powder to invest into this dislocated market. Meanwhile, in our existing portfolio, we’ve absorbed the increase in interest rates and cash flows are growing more stable in most areas. We continue to see robust fundamentals in logistics, student housing and data centers, which together comprise the majority of our real estate equity portfolio.
That said, in Q4, the value of our funds declined by 4% to 4.5%, primarily relating to two factors. First, the single largest driver was the decline in the unrealized value of our interest rate hedges as Treasury yields fell. We put these structures in place to fix our financing costs ahead of the rise in interest rates and they have generated significant value. Second, in our life sciences office and US multifamily holdings, near term performance has decelerated as new supply works its way through the system, the residual effect of construction undertaken in a low rate environment. The good news is that new supply in these sectors, and for virtually all other types of real estate, is declining materially, as I mentioned. We believe that with our exceptional portfolio positioning and large scale dry powder, our real estate business will emerge from this cycle even stronger than before.
Outside of real estate, our other businesses are demonstrating resiliency and fundamental strength. Our credit and insurance teams had a remarkable year in 2023, with gross returns of 16.4% in the private credit strategies and 13% in liquid credit. These are extraordinary results for a performing credit business. The default rate across our nearly 2000 non-investment grade credit is only 30 basis points over the last 12 months. And in our investment grade focused business, we placed or originated $30 billion of A quality credit on average in 2023 for our major insurance clients, which generated 190 basis points of excess spread compared to comparably rated liquid credits. In corporate private equity, our operating companies overall reported healthy revenue growth in the fourth quarter of 7% year-over-year, along with margin strength.
