Beats the estimate
The Blackstone Group (BX) reported its second quarter earnings on July 21. The company beat Wall Street analysts’ economic net income estimates of $0.39. It posted an economic net income of $0.44. Blackstone is the world’s biggest alternative asset manager. The stock rose 3.8% on strong operating performance. The company has underperformed its peers in the alternative space due to a weak performance of its private equity holdings, partially offset by its real estate performance. The alternative asset manager giant has deployed a record amount of capital over the past six months in order to take advantage of cheap valuations.
Blackstone reported an economic net income of $520 million in the second quarter, mainly due to higher investment income, dividend, and base fees partially offset by lower performance fees in comparison to the prior year quarter. Its assets under management rose by 7% on a year-over-year basis to $356 billion. The company invested $4 billion in new opportunities.
Alternative investment giant
Blackstone provides financial advisory services to clients around the world. The company’s alternative asset management includes investment vehicles focused on private equity, real estate, hedge fund solutions, funds of funds, non-investment-grade credit, and multi-asset class exposures outside other funds’ mandates.
Blackstone also provides financial advisory services, including financial and strategic advisory services, restructuring and reorganizing advisory services, and capital market and fund placement services. The company faces competition from alternative asset managers as well as traditional asset managers that form part of the SPDR S&P 500 Index (SPY).
Blackstone’s revenue fell 40% in the last fiscal year. The revenue growth for Blackstone’s peers The Carlyle Group (CG), KKR (KKR), and Apollo Global Management (APO) fell 7.2%, 18.3%, and 59.6%, respectively.
In the rest of this series, we’ll take a look at Blackstone’s private-market performance, public markets, credit, advisory, dividends, and valuations. Let’s start with Blackstone’s private equity portfolio performance in 2Q16.