Blackstone's first-quarter earnings more than double

Key Points
  • Blackstone posted a 165 percent rise in first-quarter earnings.
  • Earnings blew past expectations, according to a Thomson Reuters poll.
  • Assets under management totaled $368.2 billion, up 7 percent year-on-year.

Blackstone, the largest manager of assets such as private equity and real estate, reported a 165 percent first-quarter earnings rise on Thursday, as the value of its holdings soared and it generated record proceeds selling some of them.

Blackstone's strong earnings illustrate how the stock market rally, which was fueled by hopes of policy reform under the new administration of U.S. President Donald Trump, benefited buyout firms by allowing the sale of assets at very high valuations.

Blackstone, whose co-founder and chief executive Stephen Schwarzman is an economic adviser to Trump and chairs his strategic and policy forum, said the sale of assets for top dollar allowed it to pay its second highest quarterly dividend ever, equivalent to 87 cents per common unit.

"In total, we will have distributed nearly $14 per common unit of value since the IPO (of Blackstone in 2007), including $2.50 per year on average over the past three years, making Blackstone consistently one of the highest yielding large capitalization companies in the world," Schwarzman said in a statement.

Blackstone said economic net income (ENI) per share, a metric of its profitability which takes into account the mark-to-market valuation of its portfolio, came in at 82 cents versus 31 cents in the first quarter of 2016.

This surpassed the expectations of most research analysts, whose forecasts in a Thomson Reuters poll averaged 68 cents per share.

Distributable earnings, which show actual cash that is available to pay dividends, rose in the first quarter by 212 percent to $1.23 billion.

Blackstone's private equity business reported a 291 percent rise in ENI, with its buyout funds appreciating 6.9 percent in the quarter. Its real estate business posted an 86 percent rise in ENI, and its opportunistic real estate funds appreciated by 5.7 percent.

Blackstone's credit and hedge-fund-of-funds businesses reported ENI increases of 263 percent and 217 percent, respectively.

During the quarter, Blackstone divested its 25 percent stake in hotel operator Hilton Worldwide Holdings Inc and completed the $1.8 billion initial public offering of Invitation Homes Inc, the second largest IPO ever of a real estate investment trust.

Total assets under management were $368.2 billion as of the end of March, up 7 percent year-on-year. Fee-earning assets under management rose 15 percent to $280.2 billion.