Blackstone (ticker: BX), a prominent player in the alternative asset management industry, has achieved a remarkable feat. The company recently announced that it has become the first-ever alternative manager to surpass $1 trillion in assets under management (AUM), as stated in its earnings release on Thursday. This impressive milestone comes as no surprise considering Blackstone’s ambitious goal set back in 2018 when its AUM stood at $439 billion.
Driving Forces Behind Success
A significant contributor to Blackstone’s journey towards this milestone is its successful Blackstone Real Estate Income Trust. This giant entity specializes in owning rental housing, industrial properties, and data centers located in high-growth regions of California and elsewhere. Additionally, Blackstone’s expansion into the insurance sector, including the substantial $3 billion acquisition of Allstate, has played a crucial role in building its colossal $1 trillion asset pile.
Market Response
Despite this exciting achievement, Blackstone’s stock experienced a decline on Thursday, trading down at $106.46, a drop of approximately 2%. Nevertheless, it is worth mentioning that the stock is still up nearly 46% for the year, currently standing at $106.53. Speculation has arisen that the world’s largest alternative-asset manager could potentially be included in the S&P 500. This rumor emerged after S&P Dow Jones Indices, the governing body of the benchmark index, relaxed its criteria in April to allow companies with multiple classes of stock to gain entry.
Second-Quarter Performance
In the second quarter, Blackstone reported 93 cents per share in distributable earnings, which amounts to approximately $1.2 billion. This figure represents a decline of nearly 40% compared to the $2 billion posted during the same period last year. Despite the drop, analysts polled by FactSet had expected earnings of 92 cents per share. Furthermore, Blackstone witnessed a slight decrease in fee-producing AUM from the previous quarter. Assets generating fees in the second quarter totaled $731 billion, down from $732 billion in the first quarter.
Wells Fargo analyst Finian P. O’Shea commented on one particular aspect that stood out in Blackstone’s report – the lack of quarter-to-quarter progress for fee AUM. He maintains an Overweight rating on the stock with a target price of $104.
Rest assured, this latest accomplishment solidifies Blackstone’s position as an influential force within the alternative asset management industry, showcasing the company’s unwavering determination and promising future prospects.
