Blackstone's Earnings Rebound with Market Surge
23 Juli 2020 - 1:29PM
Dow Jones News
By Miriam Gottfried
Blackstone Group Inc.'s second-quarter results rebounded as the
surging stock market lifted the value of the private-equity giant's
portfolio.
The New York firm swung to a profit after posting a steep loss
in the first quarter as the S&P 500 recorded its biggest
percentage gain in more than two decades and finished up 20% in the
period. The value of its private-equity portfolio climbed by 12.8%
compared with a 21.6% decline in the first quarter.
Blackstone posted net income of $568.3 million, or 81 cents a
share, for the second quarter. That compares with a profit of
$305.8 million, or 45 cents, a year earlier.
Blackstone's distributable earnings, or the amount of cash that
could be returned to shareholders, fell to $548 million, or 43
cents a share, from $708.9 million, or 57 cents, as the firm sold
off fewer investments.
Assets under management were about $564 billion, up from $538
billion at the end of the first quarter. The firm has set a goal of
reaching $1 trillion in assets by 2026.
Blackstone raised $20 billion during the quarter, leaving it
with a record $156 billion of unspent cash. It has put some of that
to work, continuing a focus on investing in fast-growing companies,
one of President Jonathan Gray's strategies for navigating an
expensive market.
In June, Blackstone's real-estate business said it was taking a
49% stake in a venture that will own three Hollywood film-studio
lots and five adjacent office buildings, valuing the properties at
$1.65 billion. Last week, the firm said it was the lead investor in
a $200 million fundraising round for oat-milk maker Oatly AB.
Blackstone's life-sciences business has also been active.
But opportunities to write big checks have been limited.
In an interview, Mr. Gray said the large leveraged buyouts the
firm has traditionally been known for are still challenging to get
done.
"It felt before the resurgence of the pandemic that deal
activity was really going to pick up," he said. "Right now, it
feels like it might take a little more time because there's a lot
of uncertainty out there."
Mr. Gray, heir-apparent to Chief Executive Stephen Schwarzman
after making a name for himself building Blackstone's formidable
real-estate operation, said he sees opportunity longer term in
offices and hotels, which have been severely affected by
coronavirus shutdowns.
Blackstone's significant holdings of warehouses have been a boon
as they benefit from a surge in e-commerce.
The firm's hedge-fund business posted a gross return of 6%, its
highest quarterly return since 2000.
Blackstone distributed $590 million through dividends and share
repurchases during the quarter. It said it would pay a dividend of
37 cents a share, versus 48 cents a year earlier.
Write to Miriam Gottfried at Miriam.Gottfried@wsj.com
(END) Dow Jones Newswires
July 23, 2020 07:14 ET (11:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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