Blackstone revenue falls to $1.22 billion

Black Stone inc

BX -4.20%

First-quarter profits fell as the value of the private equity giant’s investments slowed.

The New York-based company reported net income of $1.22 billion, or $1.66 per share, compared to $1.75 billion, or $2.46, for the same period last year.

The value of Blackstone’s corporate private equity portfolio rose 2.8% in the quarter. This significantly outperformed the S&P 500, which fell 4.9% over the period but lagged the portfolio’s 15% gain a year earlier.

Virtually all of the company’s other major strategies rose during the quarter, led by its opportunistic real estate portfolio, which rose 10%. Blackstone’s global portfolio of bearings used for e-commerce contributed to the increase in performance.

“As we’ve grown, we haven’t sacrificed returns,” CEO Stephen Schwarzman said Thursday when speaking to analysts. “In the first quarter, our funds delivered strong performance while almost all major non-commodity asset classes declined.”

Distributable earnings, or cash that could be returned to shareholders, were $1.94 billion, or $1.55 per share, versus $1.19 billion, or 96 cents. The latest total was the second-highest in the company’s history after the fourth quarter of 2021.

Blackstone shares were up more than 6% this week through Wednesday’s close and down 2% in morning trade.

Blackstone has been busy amid a boom in private equity deals. The company sold $23.2 billion in assets during the quarter, raising proceeds from financial firm IntraFi Network LLC and home health care equipment provider Apria Healthcare Group LLC, among others.

The company has committed to four major transactions since the beginning of the year: a deal for Australian casino operator Crown Resorts GmbH.

the recapitalization of European warehousing company Mileway; a takeover bid for Italian highway operator Atlantia SpA; and just this week a deal for student accommodation operator American Campus Communities inc

“The biggest challenge is avoiding companies that are exposed to sharply rising interest rates and/or inflationary pressures and lack pricing power,” Blackstone President Jonathan Gray told The Wall Street Journal. “They want to find companies that can generate revenue growth that far exceeds these inflationary pressures.”

He said Blackstone’s lending business owns almost all of its adjustable-rate debt and its real estate business has focused on properties with short-term leases, such as student housing. His private equity business avoids industrial companies that face high input costs.

Blackstone’s assets under management increased to $915.5 billion, compared to $880.9 billion in the previous quarter and $648.8 billion a year ago. The company raised nearly $50 billion during the quarter, bringing it closer to its goal of reaching $1 trillion in wealth by 2026.

Blackstone, which originally set this goal in 2018, has announced that it will now achieve it this year.

Perpetual assets under management more than doubled to $338.2 billion, supported by strong inflows into products targeting affluent individuals such as non-traded real estate fund BREIT and personal loan fund BCRED. The two products have helped the company significantly expand the number of investors it serves.

Blackstone announced it would pay a dividend of $1.32 per share, up from 82 cents a year ago.

write to Miriam Gottfried at

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