Blackstone Inc. (BX) shares are on a roll, soaring in premarket trading after the private equity behemoth announced a strong third-quarter performance that surpassed analysts’ expectations. The firm’s revenue and earnings figures underscore its continued dominance in the alternatives industry.
Blackstone’s third-quarter segment revenue reached $2.434 billion, exceeding the consensus estimate of $2.408 billion. Distributable earnings (DE), a key metric for private equity firms, rose 6% year-over-year to $1.279 billion. Fee-related earnings, a measure of management and advisory fees, increased 5% to $1.18 billion, demonstrating Blackstone’s growing influence in the market.
While fee-related earnings declined by 8% in the Real Estate segment, they surged 25% in the Credit & Insurance business and 9% in the Private Equity segments. This highlights Blackstone’s diversified business model and its ability to capitalize on various investment opportunities.
Net accrued performance revenue, which represents the profit from investments, also rose to $7.0 billion in the quarter, up from $6.44 billion in the previous year. This indicates strong performance across Blackstone’s portfolio of investments.
The company also reported impressive asset under management (AUM) growth, increasing by 10% year-over-year to $1.108 trillion. This reflects strong investor confidence and significant capital inflows, with $40.5 billion in new investments during the quarter.
Dividend Boost and Share Repurchases
Blackstone declared a quarterly dividend per share of $0.86, payable on November 4, 2024, to shareholders of record as of October 28, 2024. This dividend increase further underscores Blackstone’s commitment to shareholder value.
The company also repurchased 1.0 million shares in the third quarter, demonstrating its confidence in its own future prospects. Blackstone has an authorization remaining of $1.9 billion for share repurchases as of September-end.
Strategic Investments and Growth
Blackstone’s CEO and Chairman, Stephen A. Schwarzman, expressed optimism about the company’s position, highlighting the firm’s active investment strategy. “We invested or committed $54 billion in the quarter — the highest in over two years — and deployed $123 billion in the last twelve months since the cost of capital peaked,” he said.
Schwarzman also emphasized the company’s strong track record of attracting investors, noting, “The third quarter also represented the highest amount of overall fund appreciation in three years, and our limited partners entrusted us with over $40 billion of inflows. Blackstone is exceptionally well positioned as the reference firm in the alternatives industry, with leading platforms in compelling, high-growth areas.”
Blackstone’s recent investments include a significant commitment to building one of Europe’s largest AI data centers in the North East of England. Additionally, the firm partnered with CPP Investments to acquire AirTrunk from Macquarie Asset Management and the Public Sector Pension Investment Board.
Market Performance
Blackstone’s strong performance has translated into significant stock appreciation. According to Benzinga Pro, BX stock has gained over 51% in the past year. Investors seeking exposure to the private equity market can consider investing in ETFs such as EA Series Trust WHITEWOLF Publicly Listed Private Equity ETF LBO and Invesco Global Listed Private Equity ETF PSP.
Blackstone’s impressive earnings, strong dividend policy, strategic investments, and robust growth outlook make it a compelling investment proposition for investors seeking exposure to the alternatives sector.