BLACKSTONE beat Wall Street’s expectations on its key quarterly earnings metric on Thursday (Oct 17), as the world’s largest alternative investment firm’s assets under management (AUM) hit a record US$1.1 trillion and the value of its funds rose.
New York-based Blackstone said it saw US$41 billion of inflows during the third quarter, while it deployed and committed US$54 billion of capital, the highest in over two years, amid a revival in dealmaking activity as the US Federal Reserve cut rates and the economic outlook remained sanguine.
Over the past few quarters, high interest rates had been a drag on some aspects of Blackstone’s business. With the Fed now entering into an easing cycle, the firm saw that weight starting to lift.
The company’s private equity funds appreciated by 6.2 per cent in the quarter and its infrastructure funds by 5.5 per cent, contributing to Blackstone’s highest fund appreciation in three years.
Chief executive Steve Schwarzman hailed the results as “broad-based acceleration across our business”.
Blackstone’s distributable earnings, which represent cash that can be used to pay dividends, totalled US$1.3 billion in the third quarter, up 6 per cent from the previous year. This translated into distributable earnings per share of US$1.01, surpassing analysts’ average estimate of US$0.92, according to LSEG data.
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Fundraising during the quarter was led by credit. It said private wealth AUM hit US$250 billion, with individual fundraising nearly doubling year-to-date compared to the previous year.
Blackstone’s shares were up 6.65 per cent at US$170.29 in the afternoon trading on Thursday, giving the firm a market value of about US$208 billion.
Among Blackstone’s major deals in the quarter was a US$16 billion acquisition of Australia’s AirTrunk, which furthered the fund’s hold in the data centre market supporting cloud services and AI. It also agreed to acquire US software firm Smartsheet for US$8.4 billion, including debt, along with Vista Equity Partners.
“I’m a believer that the environment is falling into place, both for more IPOs and more M&A,” said Blackstone’s president Jonathan Gray on the earnings call, “As the price of the public market goes up, it’s like a magnet pulling private companies into the market.”
The firm’s market capitalisation now stands at US$195 billion, with its stock reaching an all-time closing high of US$159.71 on Oct 16. REUTERS
