8-K: Blackstone Reports Strong Third Quarter 2024 Results, Driven by Record Investment Activity and Fund Appreciation

Blackstone announced robust third-quarter results for 2024, marked by significant investment activity, strong fund appreciation, and substantial inflows from limited partners.

Summary

• Blackstone reported strong third-quarter results for 2024, with a significant acceleration across its business.
• The company invested or committed $54 billion during the quarter, the highest in over two years, and deployed $123 billion in the last twelve months.
• Blackstone experienced the highest amount of overall fund appreciation in three years during the third quarter.
• Limited partners entrusted Blackstone with over $40 billion of inflows in the quarter.
• GAAP Net Income was $1.6 billion for the quarter and $4.1 billion year-to-date.
• Fee Related Earnings (FRE) were $1.2 billion ($0.96/share) for the quarter and $4.5 billion ($3.68/share) over the last twelve months.
• Distributable Earnings (DE) were $1.3 billion ($1.01/share) for the quarter and $5.2 billion ($4.06/share) over the last twelve months.
• Net Accrued Performance Revenues reached $7.0 billion ($5.72/share).
• Total Assets Under Management (AUM) reached $1,107.6 billion, with Fee-Earning AUM at $820.5 billion.
• Perpetual Capital AUM was $434.7 billion.
• Blackstone declared a quarterly dividend of $0.86 per share, payable on November 4, 2024.

Sentiment

Score: 8

Explanation: The document presents a very positive outlook with strong financial results, record investment activity, and significant fund appreciation. While there are some minor negative points, the overall tone is optimistic and indicates a strong performance for the quarter.

Positives

• Blackstone's investment activity reached a two-year high, indicating strong deployment of capital.
• The company experienced the highest fund appreciation in three years, demonstrating successful investment strategies.
• Substantial inflows from limited partners show strong investor confidence in Blackstone.
• Fee Related Earnings and Distributable Earnings per share increased year-over-year.
• Total Assets Under Management and Fee-Earning AUM both saw significant growth.
• The company returned $1.2 billion to shareholders in the third quarter through dividends and share repurchases.

Negatives

• Real Estate Core+ funds declined (0.5)% in the quarter and (3.8)% over the LTM.
• Realized Principal Investment Income decreased by 27% year-over-year.
• Net Realizations decreased by 13% year-over-year.
• Realized Performance Revenues in Private Equity decreased by 28% year-over-year.
• Segment Distributable Earnings in Private Equity decreased by 11% year-over-year.

Risks

• The document mentions forward-looking statements are subject to various risks and uncertainties, including those described in their annual report.
• The document notes that actual outcomes or results could differ materially from those indicated in forward-looking statements.
• The document highlights that investment performance is subject to market fluctuations and economic conditions.

Future Outlook

The document contains forward-looking statements regarding operations, taxes, earnings, financial performance, share repurchases, and dividends, but notes that actual results may differ materially due to various risks and uncertainties.

Management Comments

• Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, Blackstone reported strong third-quarter results, highlighted by broad-based acceleration across our business.
• He also noted that Blackstone invested or committed $54 billion in the quarter, the highest in over two years, and deployed $123 billion in the last twelve months since the cost of capital peaked.
• He stated that the third quarter also represented the highest amount of overall fund appreciation in three years, and limited partners entrusted them with over $40 billion of inflows.
• He concluded that Blackstone is exceptionally well positioned as the reference firm in the alternatives industry, with leading platforms in compelling, high-growth areas.

Industry Context

Blackstone's strong performance in Q3 2024 reflects a broader trend of increased investor interest in alternative assets. The company's leading position in real estate, private equity, and credit positions it well to capitalize on these trends. The high level of investment activity suggests a positive outlook for the alternative asset management industry.

Comparison to Industry Standards

• Blackstone's AUM of $1.1 trillion places it as the world's largest alternative asset manager, significantly larger than competitors such as Apollo Global Management and KKR.
• The $54 billion in investments and commitments in Q3 2024 is a substantial figure, indicating a high level of activity compared to industry averages.
• The $40 billion in inflows from limited partners demonstrates strong investor confidence, which is a key metric for alternative asset managers.
• Blackstone's FRE and DE per share are key indicators of profitability and are generally considered strong compared to industry benchmarks.
• The company's diversified investment strategies across real estate, private equity, credit, and infrastructure are in line with industry best practices for large alternative asset managers.

Stakeholder Impact

• Shareholders will benefit from the declared dividend of $0.86 per share and the share repurchases.
• Employees may benefit from the company's strong performance and potential for future growth.
• Limited partners will benefit from the strong fund appreciation and returns.
• Customers and suppliers may see increased business opportunities due to Blackstone's investment activity.

Next Steps

• Blackstone will host its third quarter 2024 investor conference via public webcast on October 17, 2024.
• The company will pay a quarterly dividend of $0.86 per share on November 4, 2024.

Key Dates

Keywords

Blackstone, alternative asset management, investments, assets under management, private equity, real estate, credit, infrastructure, financial results, distributable earnings, fee related earnings, dividends