Blackstone reported second-quarter results that exceeded analyst forecasts, with distributable earnings per share rising 26% to $1.52, compared to consensus estimates of $1.35. The alternative asset manager’s total assets under management climbed to $1.35 trillion during the period, bolstered by substantial inflows across its investment platforms.
The firm generated $31.8 billion from monetizing existing investments, supported by several major transactions. These included selling stakes in data centers to Digital Realty and transferring a majority position in power infrastructure company Sabre Industries to TPG. Additional activity involved completing public listings for advertising technology company Liftoff Mobile, a data center vehicle called Blackstone Digital Infrastructure Trust, and Indian office REIT Bagmane. Market conditions improved during the quarter after volatility had constrained deal activity earlier in the year.
Artificial intelligence investments emerged as a significant driver of performance. Blackstone indicated that nine of its ten best-performing investments held connections to AI expansion. The firm maintains stakes in entities including Anthropic and the QTS data center platform, which it took private for $10 billion in 2021. CEO Stephen Schwarzman stated that the company’s data center operations could potentially double in size over the following two years if current pipeline activities proceed as planned, describing the AI transformation as a generational opportunity.
Outlook guidance indicated that income from asset exits would moderate in the upcoming quarter but remain substantial in subsequent periods. Management projected double-digit growth in base management fees for the following year. However, challenges emerged in fundraising for certain products. The flagship Blackstone Private Credit Fund BCRED collected $1 billion during the quarter, declining from $1.9 billion previously and $3.7 billion in the comparable period from the prior year. Concerns about AI’s potential impact on software valuations prompted some wealthy investors to seek withdrawals from private credit vehicles. President Jon Gray noted that redemption requests had slowed materially as of mid-month. Net returns from private credit improved to 0.4% from breakeven in the prior quarter but remained below year-ago returns of 2.2%.
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