Blackstone’s net income nearly doubled in the third quarter, driven by strong investment performance for its largest strategies and continued expansion into fast-growing new business lines.
The New York private equity firm said earnings rose to $1.4bn, or $1.94 a share, from $794.7m, or $1.13 a share, a year earlier.
The value of Blackstone’s corporate private-equity investments climbed by 10% during the third quarter, handily beating the 0.2% appreciation for the S&P 500. Its opportunistic real-estate investments appreciated by 16%.
Blackstone’s focus on thematic investing in high-growth areas of the economy paid off with strong performance in IT services, software, advertising technology, logistics warehouses and life-science offices. The firm also notched a big gain on its agreement last month to sell the Cosmopolitan casino and hotel in Las Vegas for $5.65bn, in its most profitable real-estate deal ever.
Blackstone broke records on two earnings metrics during the quarter. Distributable earnings, or the portion of cash that could be returned to investors, reached an all-time high of $1.64bn, or $1.28 a share, more than double the $772.1m, or 63 cents a share, it reported a year earlier.
Fee-related earnings of $779m were also the highest in the firm’s history, representing a 28% improvement from a year earlier.
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 doesn’t have to be returned to shareholders within a given time frame. Half of the firm’s $46.7bn in inflows came from perpetual-capital vehicles in the third quarter.
“There has been a step-function increase in the activity of our firm as we broaden out,” Blackstone President Jonathan Gray told The Wall Street Journal. “We’re expanding what we invest in and who we invest for.”
Blackstone’s assets under management were $730.7bn at the end of the third quarter, up from $684bn in the second quarter and $584.4bn in the third quarter of 2020.
Shares of publicly traded private-equity firms have shot up in recent months. Blackstone’s stock has been a particularly strong performer, climbing more than 100% including dividends since the beginning of this year, according to FactSet. That compares with a 24% total return for the S&P 500.
The firm’s market capitalisation now stands at $156bn, making it bigger than Goldman Sachs Group and International Business Machines.
Blackstone invested $37.1bn during the quarter, including closing a deal for data centre operator QTS Realty Trust. The firm also unveiled a $5bn deal to buy Chamberlain Group, the maker of LiftMaster garage door openers, during the quarter. Blackstone sold off $21.8bn in assets during the period.
While it didn’t happen during the quarter, Blackstone said Wednesday it was taking a majority stake in shapewear pioneer Spanx.
Blackstone said it would pay a dividend of $1.09 a share, up from 54 cents a share a year earlier.
Write to Miriam Gottfried at [email protected]
This article was published by Dow Jones Newswires