Blackstone’s profit almost doubled – WSJ

black stone Inc.

BX 2.98%

net income nearly doubled in the third quarter, driven by strong investment performance from its most important strategies and continued expansion into new, fast-growing business areas.

The New York-based private equity firm said its profits reached $ 1.4 billion, or $ 1.94 per share, from $ 794.7 million, or $ 1.13 per share, a year older early.

The value of private equity investments by Blackstone’s companies climbed 10% in the third quarter, handily beating the S&P 500’s 0.2% appreciation. Its opportunistic real estate investments rose 16%.

Blackstone’s focus on thematic investing in high growth areas of the economy has paid off with strong performance in IT services, software, ad technology, logistics warehouses and science offices. life. The company also recorded a big gain on its deal last month to sell the casino and Cosmopolitan hotel in Las Vegas for $ 5.65 billion, in its highest-grossing real estate deal of all time.

Blackstone broke records on two earnings indicators during the quarter. Distributable earnings, or the portion of cash that can be returned to investors, hit an all-time high of $ 1.64 billion, or $ 1.28 per share, more than double the $ 772.1 million, or 63 cents per share, he had said a year earlier.

Fee-related revenue of $ 779 million was also the highest in company history, representing a 28% improvement over the previous year.

Blackstone has also expanded into a number of fast-growing businesses, including infrastructure, direct lending, insurance, and products designed for individual investors that bolster its so-called perpetual capital, which does not have to be returned. to shareholders within a given period. Half of the company’s $ 46.7 billion in entries came from perpetual vehicles in the third quarter.

“There has been a gradual increase in the activity of our business as we have grown,” Blackstone chairman Jonathan Gray told The Wall Street Journal. “We are expanding what we invest in and who we invest in.

The company has had success with products targeting individual investors, including its unlisted real estate investment trust, known as BREIT, and a private credit fund called BCRED. Blackstone launched BPIF, a vehicle focused on European real estate earlier this month.

It also reopened its perpetual infrastructure fund to new investment. The fund, which had raised $ 14 billion, committed more than 80% of this capital.

Blackstone’s assets under management stood at $ 730.7 billion at the end of the third quarter, compared to $ 684 billion in the second quarter and $ 584.4 billion in the third quarter of 2020.

Shares of publicly traded private equity firms have skyrocketed in recent months. Blackstone’s stock has been particularly strong, climbing more than 100% including dividends since the start of this year, according to FactSet. This compares to a 24% total return for the S&P 500 at Wednesday’s close.

Blackstone stock rose 2.7% to $ 132.18 late Thursday afternoon.

The company’s market capitalization now stands at $ 156 billion, making it larger than Goldman Sachs Group Inc.

and international trade machines Corp.

Blackstone invested $ 37.1 billion in the quarter, including closing a deal for data center operator QTS Realty Trust Inc. The company also unveiled a $ 5 billion deal to buy Chamberlain Group LLC, garage door opener manufacturer LiftMaster, during the quarter. Blackstone sold $ 21.8 billion in assets during the period.

While that did not happen during the quarter, Blackstone said on Wednesday it was taking a controlling stake in shapewear pioneer Spanx Inc.

Blackstone said it would pay a dividend of $ 1.09 per share, up from 54 cents per share a year earlier.

Write to Miriam Gottfried at [email protected]

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