Blackstone’s profit nearly doubles as total assets set quarterly record

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Blackstone headquarters in New York.

Angus Mordant/Bloomberg

Shares of


black stone

rose on Thursday after the world’s largest alternative asset manager’s total assets hit a quarterly record and profits doubled, thanks to a strong fundraising performance.

The New York-based investment firm reported fourth-quarter net income of $1.4 billion, or $1.93 per share, higher than a year earlier by $748.9 million, or $1.07 per share.

Blackstone stock (ticker: BX) rose 7.4% to $119.66 in recent trades, while the S&P 500 rose 1%. The stock had fallen 14% year-to-date to Wednesday’s close, compared to an 8.7% drop for the S&P 500. “The rotation from growth stocks to value hurts alternative managers,” said Piper Sandler analyst Sumeet Mody. Barrons. “But as it ends, it will benefit [Blackstone].”

Last year, Blackstone stock gained nearly 100%, while the S&P 500 rose 27%.

Blackstone’s total assets under management rose 42% to $880.9 billion in the fourth quarter, beating Wall Street’s estimate of $818.6 billion and the company’s fastest growing in over a decade. Admissions amounted to $154.8 billion. Excluding the AIG Life and Retirement and Everlake Life acquisitions, which closed last November, inflows were over $77 billion, which is still a huge number, Mody said.

“It’s just a matter of BX accumulating assets very well and just at a higher level” than its rivals


KKR

(KKR) and


Carlyle Group

(CG), Mody said. He pointed to Blackstone funds such as BCRED and BREIT, which raised a record $4.4 billion and $9.9 billion during the quarter, respectively, and BPP, which raised $2.4 billion. . While these vehicles have helped Blackstone’s revenue, the company has had a strong fundraising cycle overall, Mody noted.

In the fourth quarter, distributable income – the money Blackstone uses to pay shareholders – was $2.27 billion, or $1.71 per share, compared with $1.46 billion, or $1.13 per share. action, a year earlier. Analysts tracked by FactSet had expected distributable income of $1.8 billion.

In its earnings call, Blackstone said it expects to raise about $150 billion in total for 17 funds over the next 18 months, reflecting a 25% increase from the previous cycle. “We expect to begin lifting our two biggest flagships, global real estate and corporate private equity, this quarter,” management said.

Real estate, in particular, is key for Blackstone, said Jefferies analyst Gerald O’Hara. Barrons. “Seventy percent of their portfolio is logistics, life science offices and housing,” he said. All of these sectors pay rents that typically increase by two to three times the rate of inflation, he said.

As public markets continue to show volatility as interest rates rise, Blackstone remains well positioned, O’Hara said, pointing to the $135.8 billion dry powder Blackstone reported. in the fourth trimester.

Write to Karishma Vanjani at [email protected]

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