Blackstone shares surged by 7% on Thursday after the world’s largest alternative investment firm reported impressive quarterly earnings that exceeded Wall Street expectations.
The firm’s assets under management (AUM) reached a record $1.1 trillion, reflecting a robust growth trajectory in its investment portfolio.
This surge in AUM is indicative of Blackstone’s resilience and adaptability in a challenging economic environment, with a renewed focus on deal-making as interest rates begin to stabilize.
During the third quarter, Blackstone recorded $41 billion in inflows and committed a remarkable $54 billion in capital, marking the highest level of investment in over two years.
This uptick comes on the heels of a revival in deal-making activity, bolstered by the US Federal Reserve’s recent decision to cut interest rates, which has improved the economic outlook.
Previously, high interest rates had been a constraint on some areas of Blackstone’s operations, but with the Fed now easing its monetary policy, the firm has begun to feel relief from these pressures.
The firm reported a 6.2% appreciation in its private equity funds and a 5.5% rise in its infrastructure funds, contributing to its highest overall fund appreciation in three years.
Chief Executive Officer Steve Schwarzman attributed this success to “broad-based acceleration across our business,” underscoring the firm’s diverse portfolio and strategic investments.
Blackstone’s distributable earnings, which are crucial for dividend payments, totaled $1.3 billion in Q3, reflecting a 6% year-over-year increase.
This translated to distributable earnings per share of $1.01, significantly above the analysts’ average estimate of $0.92, according to LSEG data.
Blackstone’s private wealth AUM reach $250 billion
The firm’s strong performance in fundraising was led by its credit division, with private wealth AUM reaching $250 billion.
Notably, individual fundraising nearly doubled year-to-date compared to the same period last year.
Among Blackstone’s key transactions in the quarter was a $16 billion acquisition of Australia’s AirTrunk, enhancing the firm’s position in the data center market, which supports cloud services and artificial intelligence initiatives.
Additionally, Blackstone partnered with Vista Equity Partners to acquire US software company Smartsheet for $8.4 billion, including debt.
With a market capitalization now at $195 billion, Blackstone’s stock reached an all-time closing high of $159.71 on October 16, further solidifying its status as a leader in the alternative investment sector.
The strong quarterly results and strategic acquisitions position Blackstone for continued growth and success in the coming years, reflecting investor confidence and market optimism.
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