July 24, 2021

The World Stock Markets Tips & Targets, News, Views & Updates

The World Stock Markets Tips & Targets, News, Views & Updates

Blackstone doubles second quarter earnings on surging asset sales

Group Inc said on Thursday its second-quarter distributable earnings nearly doubled year-on-year, driven by a surge in asset sales across its real estate, private equity and credit businesses.

Blackstone’s shares rose 4.5% on Thursday morning, pushing its market capitalization to a record high of $131 billion, overtaking Goldman Sachs Group Inc, another Wall Street heavyweight.

Shares of other publicly listed private equity firms also staged record rallies as they capitalized on frothy market valuations to cash out on assets for top dollar. Private equity firms that had previously been wary of a stock market debut, such as TPG and L Catterton, are now considering following suit, Reuters has reported.

Blackstone’s distributable earnings, which represents the cash used to pay dividends to shareholders, rose to $1.1 billion from $548 million a year earlier.

This translated into distributable earnings per share of 82 cents, surpassing the average analyst estimate of 78 cents, data compiled by Refinitiv showed.

said its capital deployment reached a record $23.8 billion during the quarter. It also committed to investing an additional $28.5 billion in deals such as acquiring a majority stake in medical supplier Medline Industries Inc alongside Carlyle Group Inc and Hellman & Friedman.

Buoyant capital markets and rising company valuations allowed to cash out a lot of its investments. Total asset sales reached $19.6 billion, including the $2.9 billion divestment of its portfolio of warehouse and logistics assets in Australia.

“We remain focused on our high-conviction thematic areas, such as sustainability, logistics, digital infrastructure, housing and the post-COVID travel recovery,” Blackstone President Jonathan Gray said during an earnings call with analysts.

The buyout firm said its private equity portfolio grew 13.8% in the second quarter, compared with a 8.2% rise in the benchmark S&P 500 stock index over the same period.

Opportunistic and core real estate funds rose 9.4% and 5.7%, respectively.

Last week, Blackstone said it reached a $7.3 billion agreement with insurer American International Group Inc to buy a portfolio of rent-controlled apartments and a nearly 10% stake in a life and retirement unit that will be spun off from the insurance giant.

This will bring in an additional $50 billion in assets under management, pushing Blackstone’s total insurance assets to $150 billion, Gray said. Blackstone is also one of the largest U.S. property landlords.

Blackstone said its net income under generally accepted accounting principles doubled to $1.3 billion, driven by a sharp rise in investment income.

Its total assets under management rose to $684 billion from $648.8 billion in the prior quarter. Unspent capital fell to $129.9 billion from $148.2 billion three months earlier owing to the pace of capital deployments.

Blackstone declared a quarterly dividend of 70 cents per share.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Share This :