8-K: Blackstone Reports Strong Second Quarter 2024 Results Driven by Record Investment Activity

Blackstone announced strong second quarter 2024 results, highlighted by nearly $40 billion in inflows and $34 billion in deployments, the highest level of investment activity in two years.

Summary

• Blackstone reported a GAAP net income of $948 million for the second quarter of 2024 and $2.5 billion year-to-date.
• Net income attributable to Blackstone Inc. was $444 million for the quarter and $1.3 billion year-to-date.
• The company saw total inflows of $39.4 billion in the quarter and $151.5 billion over the last twelve months.
• Blackstone deployed $33.7 billion in the quarter and $101.8 billion over the last twelve months.
• Total assets under management (AUM) reached $1,076.4 billion, a 7% increase year-over-year.
• Fee-earning AUM was $808.7 billion, up 11% year-over-year.
• Perpetual capital AUM reached $418.6 billion, a 9% increase year-over-year.
• Fee Related Earnings (FRE) were $1.1 billion ($0.91 per share) for the quarter and $4.4 billion ($3.64 per share) over the last twelve months.
• Distributable Earnings (DE) were $1.3 billion ($0.96 per share) for the quarter and $5.1 billion ($3.99 per share) over the last twelve months.
• Net accrued performance revenues were $6.2 billion ($5.08 per share).
• A quarterly dividend of $0.82 per share was declared, payable on August 5, 2024.
• The company repurchased 2.0 million common shares in the quarter and 4.4 million over the last twelve months.
• Blackstone increased its share repurchase authorization to $2.0 billion.

Sentiment

Score: 7

Explanation: The document presents a generally positive picture with strong growth in AUM and deployment, but there are some negative aspects such as the decrease in net income and some underperformance in real estate. The overall tone is optimistic, but the results are mixed.

Positives

• Blackstone experienced strong inflows of $39.4 billion in the quarter, demonstrating investor confidence.
• The company's deployment of $33.7 billion indicates active investment strategies.
• The increase in total AUM, fee-earning AUM, and perpetual capital AUM shows strong growth across the business.
• The company's Fee Related Earnings (FRE) and Distributable Earnings (DE) are robust, indicating strong profitability.
• The dividend of $0.82 per share and share repurchases demonstrate a commitment to returning capital to shareholders.
• Blackstone's investment performance across various strategies, including infrastructure and private credit, was strong.

Negatives

• GAAP net income attributable to Blackstone Inc. decreased to $444 million in the second quarter of 2024 from $601 million in the same quarter of 2023.
• Real estate opportunistic funds declined by 5.3% over the last twelve months.
• Real estate core+ funds declined by 3.1% over the last twelve months.
• Fee Related Earnings decreased by 3% compared to the same quarter last year.
• Net income per share of common stock decreased by 27% compared to the same quarter last year.

Risks

• The document mentions forward-looking statements are subject to various risks and uncertainties, including those described in the company's annual report.
• The real estate sector experienced some declines in appreciation, which could impact future performance.
• The document notes that investment performance is subject to market fluctuations and economic conditions.
• The company's performance is dependent on its ability to continue to attract capital and deploy it effectively.

Future Outlook

The document includes forward-looking statements regarding operations, taxes, earnings, financial performance, share repurchases, and dividends, but notes these are subject to risks and uncertainties.

Management Comments

• Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, 'We reported another quarter of strong results, underpinned by nearly $40 billion of inflows and $34 billion of deployment reflecting the highest level of investment activity in two years. We are planting the seeds of future value creation.'
• Blackstone is also in the early days of penetrating markets of enormous potential as a key solutions provider to clients and partners globally particularly through large-scale investments in critical digital and energy infrastructure supporting the artificial intelligence revolution.

Industry Context

Blackstone's results reflect the broader trend of increased investment in alternative assets, particularly in areas like infrastructure and digital technology, driven by the artificial intelligence revolution. The company's focus on large-scale investments aligns with the industry's move towards more significant and impactful projects.

Comparison to Industry Standards

• Blackstone's AUM of $1,076.4 billion positions it as the world's largest alternative asset manager, significantly larger than competitors such as Apollo Global Management (approximately $651 billion AUM) and KKR (approximately $553 billion AUM).
• The company's deployment of $33.7 billion in the quarter is a substantial figure, indicating a high level of activity compared to peers.
• Blackstone's focus on perpetual capital, which reached $418.6 billion, is a strategic advantage, providing a stable base of long-term capital, unlike firms more reliant on traditional fund structures.
• The company's FRE and DE figures are strong, but comparisons to peers are difficult due to varying accounting practices and business models.
• Blackstone's investment performance, particularly in infrastructure (21.6% LTM) and private credit (18.1% LTM), is competitive with industry benchmarks, though real estate performance was weaker.

Stakeholder Impact

• Shareholders will benefit from the declared dividend of $0.82 per share and the share repurchase program.
• Employees may benefit from the company's strong performance and growth.
• Clients and partners will benefit from Blackstone's continued investment activity and focus on value creation.
• The company's investments in infrastructure and digital technology may have a broader positive impact on society.

Next Steps

• Blackstone will continue to focus on large-scale investments in critical digital and energy infrastructure.
• The company will continue to deploy capital and seek to generate returns for investors.
• Blackstone will continue to return capital to shareholders through dividends and share repurchases.

Key Dates

Keywords

Blackstone, alternative asset management, assets under management, private equity, real estate, credit, infrastructure, distributable earnings, fee related earnings, investment, dividend, share repurchase