Blackstone posts modest Q2 profit jump on private equity, credit gains
Add comments from earnings call, share reaction
By Echo Wang
NEW YORK, July 18 (Reuters) -Blackstone BX.N said on Thursday its second-quarter distributable earnings rose 3% from a year earlier, as a jump in asset sales in its private equity and credit divisions more than offset a slump in its real estate arm.
The New York-based investment firm's results underscore how a long spell of high interest rates has dragged down some aspects of its business while buoying others.
High rates have weighed on Blackstone's real estate value and made dealmaking more expensive, yet they also boosted the worth of its credit assets and helped tame inflationary pressures.
Hopes that the U.S. Federal Reserve will start cutting rates have contributed to a market rally that Blackstone has seized on to cash out on some of its companies for top dollar.
Blackstone's distributable earnings, which represent cash that can be used to pay dividends, totaled $1.3 billion in the second quarter. This translated into distributable earnings per share of 96 cents, slightly short of analysts' average estimate of 98 cents, according to LSEG data.
Blackstone's shares were up 1.6% at $136.98 on Thursday, giving the world's largest manager of alternative assets such as private equity and corporate credit a market value of about $165 billion.
A 16% increase in distributable earnings in Blackstone's private equity unit and a 51% jump in its credit arm outweighed the 19% drop in distributable earnings in its real estate division.
Blackstone's core private equity funds appreciated 2% in the quarter, and the firm took advantage of the elevated market valuations to cash out on $7.8 billion of its private equity assets.
Blackstone's opportunistic real estate funds appreciated 0.3% in the quarter and the firm cashed out on $5.5 billion of real estate assets. Its private credit funds posted a gross return of 4.2% and the firm cashed out on $9.5 billion of credit assets.
The company said it saw about $40 billion inflows to its funds and deployed $34 billion in capital from them in the second quarter, the highest level of investment activity in two years.
In real estate, where Blackstone focused on logistics and rental housing and has been wary of the troubled office sector, the firm has invested $15 billion since the start of the year, nearly 2.5 times what it deployed over the same period last year.
"We are planting the seeds of future value creation," Blackstone Chief Executive Stephen Schwarzman said in a statement.
He highlighted artificial intelligence as a major area of growth and said on Blackstone's quarterly earnings call that the firm held $55 billion in data center assets that are developed or under construction and had identified another $70 billion of potential investments in the sectors.
Blackstone's President Jonathan Gray said on the earnings call that while the firm was prepared for either a Republican or Democratic administration following the U.S. election in November, many of its growth drivers, such as digitization, advances in life sciences and the growth of the private credit industry, would continue regardless.
He added that he expected a Republican-controlled federal government to prioritize fossil fuels rather than renewable energy, and that it could take a different posture on antitrust, where U.S. President Joe Biden's administration has sought to crack down on monopolies.
Fee-related earnings, which Blackstone generates from its management and advisory fees, declined 3% to $1.1 billion year-on-year.
The firm posted record total assets under management of $1.1 trillion in the quarter, up 7% year-over-year, driven by strong fundraising, and also declared a quarterly dividend of 82 cents apiece.
Reporting by Echo Wang in New York; Editing by Sherry Jacob-Phillips and Nick Zieminski
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
