The Business Times

Blackstone's first-quarter earnings surge 63%

Published Thu, Apr 21, 2022 · 11:09 PM

BLACKSTONE said on Thursday (Apr 21) its first-quarter distributable earnings jumped 63 per cent as a strong performance from its real estate and credit businesses offset a weak showing from its hedge funds unit.

The world's largest manager of alternative assets saw distributable earnings, which represent the cash used to pay dividends to shareholders, rise to US$1.9 billion from US$1.2 billion a year earlier.

That resulted in distributable earnings per share of US$1.55, which exceeded the average estimate of US$1.06 per share of analysts compiled by Refinitiv.

Blackstone said it changed the way it accounts for the fee-related performance revenue at its real estate income trust business, booking such earnings quarterly rather than annually. That helped to boost its overall earnings beyond what analysts had expected. "This will likely have the effect of making ongoing quarterly fee-related earnings somewhat higher, but also somewhat more volatile," Oppenheimer analysts wrote in a note to investors on Thursday.

For its quarterly fund performance, real estate opportunistic and core plus funds appreciated by 10.3 per cent and 7.9 per cent, respectively. Private credit funds gained 1.7 per cent while its private equity portfolio rose 2.8 per cent. That compares with a decline of nearly 5 per cent for the benchmark S&P 500 stock index.

Blackstone generated US$23.2 billion in proceeds from asset divestments across its portfolio. That included the sale of its majority stake in medical services provider Apria Healthcare to Owens & Minor in a US$1.6 billion take-private deal.

During the quarter, Blackstone spent US$22.8 billion on new acquisitions, including its US$6.4 billion takeover of Australian casino operator Crown Resorts and a US$5.8 billion deal to take real estate income trust Preferred Apartment Communities private.

Blackstone said earnings at its hedge funds unit, the world's largest, fell to US$110.8 million, down from US$157 million a year earlier, due partly to lower management fees and performance revenues.

Its hedge fund portfolio had a net return of 1 per cent during the quarter compared with a 0.3 per cent decline in the benchmark Fund Weighted Composite Index compiled by hedge fund data provider HFR.

Under generally accepted accounting principles (GAAP), Blackstone reported a net income of US$1.22 billion, down 30 per cent from US$1.75 billion a year earlier, amid higher compensation expenses and a slowdown in investment income.

Total assets under management rose to a record US$915 billion, driven by strong fundraising and bringing Blackstone closer to its goal of managing US$1 trillion in assets this year. Unspent capital stood at US$139.3 billion.

Blackstone declared a quarterly dividend of US$1.32 per share, compared with US$0.82 per share in the same quarter last year. REUTERS

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