UPDATE 1-Blackstone's first-quarter earnings surge as it cashes out on assets
(Adds analyst comment, share reaction)
By Chibuike Oguh
NEW YORK, April 22 (Reuters) - Blackstone Group Inc, the world's largest manager of alternative assets such as private equity and real estate, said on Thursday that its distributable earnings more than doubled in the first quarter to $1.2 billion as it cashed out on holdings.
The strong result cheered investors and pushed Blackstone's market value to more than $100 billion for the first time. Dealmaking activity surged in the quarter as a booming stock market and low borrowing costs emboldened private equity firms to sell some of their assets for top dollar.
Blackstone president Jonathan Gray told analysts on the firm's earnings call that it was positioning for the re-opening of the global economy following the COVID-19 pandemic by acquiring a private aviation business, a major holiday park operator in Britain, a hotel portfolio in Japan and a publicly listed hotel company in the United States. "As the economy reopens, we believe the combination of increased consumer savings, fiscal stimulus and global cabin fever will be powerful," Gray said.
Blackstone's shares were trading at $84.27 per share, up 4.93% in afternoon trading in New York on Thursday.
"The company is preparing for a broader economic reopening and they are positioning themselves well," said JMP analyst Devin Ryan.
Blackstone reported distributable earnings per share of 96 cents, surpassing the average Wall Street analyst estimate of 76 cents, according to financial data provider Refinitiv. In its push to cash out on assets in the quarter, Blackstone floated dating app Bumble Inc in the stock market in a $2.2 billion initial public offering. Blackstone had paid $3 billion for a majority stake in Bumble in 2019. New York-based Blackstone also booked the merger of its portfolio company Paysafe Limited with veteran investor Bill Foley's blank-check acquisition firm, Foley Trasimene Acquisition Corp II, which valued the U.K.-based online payments processor at $9 billion.
Blackstone said its private equity portfolio appreciated 15.3% in the quarter, compared with an 5.8% rise in the benchmark S&P 500 stock index over the same period. Opportunistic and core real estate funds rose 5.3% and 3.2%, respectively.
Total assets under management rose to $648.8 billion, from $618.6 billion in the previous quarter, driven by strong fundraising. It ended the quarter with $148.2 billion of unspent capital.
Blackstone said it would pay a quarterly dividend of 82 cents per share. (Reporting by Chibuike Oguh in New York Editing by Chizu Nomiyama)
