What happened

Shares of Blackstone (BX -1.60%) rallied 29.3% in January, according to data provided by S&P Global Market Intelligence. That helped erase some of the stock's steep slide in 2022. 

The leading alternative asset manager benefited from securing a major investment for its non-traded REIT, Blackstone Real Estate Income Trust (BREIT), which had been weighing on its stock following a surge in redemption requests. Blackstone also reported strong fourth-quarter results last month. 

So what

Toward the end of 2022, Blackstone faced a barrage of redemption requests by BREIT investors that exceeded its cap. As a result, the company fulfilled only some of the requests. That caused concerns that Blackstone's leading REIT had some liquidity issues. 

However, the company put those concerns to rest last month. It created a strategic venture with the University of California (UC Investments), which agreed to buy $4 billion of BREIT shares that it would hold for six years. UC Investments subsequently agreed to make an additional $500 million investment on the same terms. That will give BREIT additional long-term capital to pursue new investments as it works through its current redemption backlog. 

Furthermore, Blackstone reported strong fourth-quarter results in January. The company's distributable earnings were $1.07 per share during the period, which was well above analysts' consensus estimate of $0.95 per share. That enabled Blackstone to pay a slightly higher dividend than its third-quarter payment. Even though the company experienced a surge in redemptions at BREIT, money continued to flow into its investment funds. That increased its assets under management (AUM) to nearly $975 billion, up 11% from 2021.

Now what

Blackstone ended 2022 with a record $187 billion of dry powder to take advantage of compelling investment opportunities in the current market environment. That puts it in a strong position to continue generating attractive returns for its clients in the future. Those returns will grow its fee-related income and performance revenue.

Meanwhile, Blackstone sees enormous opportunities to continue growing its AUM. While BREIT has been a drag recently, it should become a growth driver again in the future as more high-net-worth investors increase their allocation to private real estate. That's one of several catalysts the company sees ahead.

That growth makes Blackstone look like a compelling long-term investment opportunity. While shares were up sharply last month, they're still about 30% below their peak. Meanwhile, the stock offers a 5% dividend yield based on its payments over the past year. Those factors position Blackstone to continue producing enticing total returns in the coming years.