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What You Can Expect from Blackstone in 2017

PART:
1 2 3 4 5 6 7 8
Part 5
What You Can Expect from Blackstone in 2017 PART 5 OF 8

Blackstone’s Hedge Fund Business: What to Look Out For

Expected performance

Blackstone (BX) recently garnered $1.5 billion to invest as startup capital for new hedge fund managers. Management has a positive outlook on the industry’s growth and so has planned to provide startup capital. The company’s hedge fund business is likely to benefit from customized solutions, specialized situations, and commingled products. Blackstone Alternative Asset Management or BAAM oversees the hedge fund business.

Blackstone’s Hedge Fund Business: What to Look Out For

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As of March 31, 2017, the division’s gross inflows stood at $3.6 billion on the back of commingled products and customized solutions. During the same period, the division’s total assets under management or AUM stood at $73.3 billion, a rise of 7% on a year-over-year basis, mainly due to customized solutions growth.

In 1Q17, the company’s total revenues stood at $1.9 billion, representing a $1 billion increase on a YoY basis. This increase was mainly due to an increase in investment income, performance fees, and management and advisory fees.

Operating margins

On a trailing-12-month or TTM basis, Blackstone’s (BX) operating margin stood at 48.40%. On the other hand, the following operating margins have been reported by alternative asset managers (XLF) on a TTM basis.

  • BlackRock (BLK): 42.06%
  • Apollo Global Management (APO): 47.62%
  • KKR & Co. LP (KKR): 56.27%

Let’s take a look at the company’s distributions in the next part of this series.

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