Blackstone Group (BX), the world's largest alternative asset manager, reported first-quarter earnings Thursday morning. The investment group experienced major asset losses, but increased its fees and distributable earnings.
Blackstone Group's earnings fell along with the rest of the stock market during the first quarter as COVID-19 wrecked global economies. Private equity saw the greatest losses, with corporate private equity declining 22% and tactical opportunities falling 16%. Opportunistic real estate declined 9%, and credit and insurance was down 14%. Hedge fund solutions fell 8.6%.
Despite those losses, Blackstone remained optimistic. "Blackstone's first-quarter financial results reflect the unprecedented market and global economic conditions caused by the COVID-19 pandemic," said CEO Stephen Schwarzman. But, he said, "Throughout our firm's 35-year history, we have weathered many difficult periods, including the global financial crisis, only to emerge stronger than before."
Bright spots for Blackstone
There were several strong points in the report: Fee-related earnings up 25% year over year, while distributable earnings grew 4%, or $0.46 per share. However, that missed the $0.50 consensus target of analysts surveyed by Bloomberg.
The company has abundant assets for investments, after having raised $250 billion over the past two years. It currently has $538 billion in total assets under management, up 5% year over year, with $27 billion flowing in during this quarter. Fee-earning assets under management are $423 billion, a 20% increase year over year. Most importantly, Blackstone has $150 billion in cash to invest in new opportunities.