Blackstone’s first-quarter profit gets boost from investment gains

The ticker and trading information for Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange.

Blackstone, the world’s largest alternative asset manager, posted on Thursday rising inflows and a jump in income from cashing in on investments for the first quarter, a period in which markets were buffeted by war and economic uncertainty.

The New York-based firm’s total assets under management leapt 12 per cent to about US$1.3 trillion. Its credit and insurance business contributed the largest chunk of new inflows, bringing in $37 billion, followed by private equity with $20.4 billion.

Managers of alternative assets - a wide range of securities that live outside traditional stock and bond markets - have seen their stock slide on fears of slower future growth, potential AI disruption to their portfolio companies and questions around lending standards.

Blackstone’s shares have rebounded this month but are still trading close to 16% lower on the year. The S&P 500 Financials Sector index .TRGSPF is down more than 4% in that time.

For the first quarter, distributable earnings, or cash that can be used to pay dividends to shareholders, rose 25 per cent to $1.76 billion, or $1.36 per share.

Chairman and CEO Stephen Schwarzman said Blackstone totted up nearly $70 billion in total inflows and achieved positive appreciation across nearly all its flagship investment strategies “despite the turbulent environment.”

“Our all-weather model protects us in these times of disruption while also allowing us to invest where we see the greatest opportunity,” he said.

Net realizations rose 26 per cent to $448.4 million. This was bolstered by the private equity business, where Blackstone sold stock in Medline, the medical devices maker it took public last year which soared from its offer price of $29 and is now trading around $47. It also sold space technology provider ARKA to U.S. defense contractor CACI International.

Institutional investors, which typically include pension funds, insurers and other holders of large capital pools who can lock up their funds for long stretches of time, contributed one of their biggest quarterly funding hauls to Blackstone’s credit business in its history, the company said.

(Reporting by Isla Binnie in New York and Utkarsh Shetti in Bengaluru)