Blackstone notches 48% quarterly profit jump as dealmaking returns
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The news: The world’s largest asset manager saw distributable earnings soar 48% in the third quarter, driven by a flurry of investment exits from its private equity unit.
The numbers: Blackstone posted its fourth consecutive quarter in which inflows exceeded USD50 billion ($76.76 billion).
Distributable earnings, rose to USD1.89 billion, or USD1.52 per share, up from USD$1.28 billion, or USD1.01 a share, in the same period last year. This was also ahead of the USD1.22 average estimate of analysts surveyed by Bloomberg.
Blackstone’s quarterly net income reached USD624.9 million, or USD0.80 per share, down from USD780.8 million, or USD1.02 a share, a year earlier.
Fee-related earning also climbed to USD1.48 billion, or USD1.20 per share, from USD1.18 billion, or USD0.96 per share, in 2024.
Blackstone’s revenue fell to USD3.09 billion, while assets under management increased 12% to a record USD1.24 trillion.
The firm took in USD54.2 billion of inflows during Q3 and USD225.4 billion over the last 12 months.
The context: Blackstone took three companies public during the quarter and more than doubled its haul from selling investments compared to the year prior. The series of exits Blackstone executed across its private equity unit indicates that dealmaking, which had been slowed by high financing costs and sluggish valuations, is returning.
Blackstone, which manages more than USD500 billion in credit and insurance-based assets, told the FT that returns earned by its credit business were declining as central banks cut interest rates.
“Base rates and spreads have come down, so the absolute returns reflect that,” Blackstone president Jonathan Gray told the FT. “Some of that excess return, when you were getting mid-teens returns as a lender in senior credit two-and-a-half years ago, has gone away. So, yes, there has been some loss of absolute return,” he added.
Gray said that while returns had fallen, Blackstone’s loans continued to yield substantially more than alternatives in liquid debt markets. “This just reflects the world, which is that returns in fixed income are lower, but returns in private credit are higher than they are in public credit,” he told the masthead.
What they said: Stephen A. Schwarzman, chairman and CEO, said: “Blackstone reported an exceptional third quarter, highlighted by outstanding financial results and robust fund-raising momentum across our three major channels – institutions, insurance and individuals. Inflows reached $54 billion in the quarter and $225 billion over the last twelve months. The leading platforms we’ve established in key growth areas, such as digital and energy infrastructure, are helping power investment performance for our clients and position us extraordinarily well for the future.”
The sources: Blackstone earnings, Bloomberg, FT, Wsj
