Weekly insights + SMS alerts
Blackstone Inc. (BX) stock rose Thursday after the alternative asset manager reported better-than-expected third-quarter earnings, although revenue missed Wall Street estimates.
Blackstone reported adjusted earnings of $1.32 per share, beating analysts' consensus estimate of $1.26.
Revenue totaled $3.217 billion, below the $3.280 billion consensus estimate.
Distributable earnings fell 9% year over year to $1.72 billion, reflecting lower investment realizations.
However, fee-related earnings increased 6% to $1.6 billion, or $1.26 per share. Total fee revenue rose 8% to $2.7 billion, while base management fees reached a quarterly record of $2 billion.
Transaction and advisory fees jumped 34% to $210 million. Meanwhile, fee-related performance revenue climbed 19% to $540 million, supported by 10 perpetual investment strategies.
Blackstone's assets under management increased 10% year over year to a record of approximately $1.4 trillion.
The firm attracted $63 billion in quarterly inflows, bringing trailing 12-month inflows to more than $270 billion, the highest level in four years.
Net realizations declined 20% from the previous quarter, consistent with management's expectations.
Blackstone identified artificial intelligence infrastructure as a major growth opportunity, citing rising computing demand and shortages of data centers, electricity and equipment.
The firm launched Crux with Alphabet Inc.'s (GOOGL) Google to address computing capacity shortages. It also partnered with Anthropic through ODE to accelerate enterprise AI adoption.
NVIDIA Corp. (NVDA) selected Blackstone among a small group of investment managers to support $500 billion in GPU financing.
NVIDIA also made a strategic investment in Blackstone portfolio company Lancium to develop low-cost power infrastructure for OpenAI's Texas data center.
Beyond AI computing, Blackstone is expanding investments in electricity generation, transmission, energy storage and related infrastructure.
Its credit business financed approximately 15% of U.S. solar and storage projects last year. Meanwhile, its credit and equity platforms supported nearly half of U.S. liquefied natural gas export capacity.
Third-quarter investments included a major European renewable energy developer and a supplier of data center cooling components.
During Thursday's earnings call, CEO Stephen Schwarzman warned that accelerating AI computing demand is intensifying an already severe supply shortage. "Seldom in my career have I seen such a supply-constrained market of this scale," Schwarzman said. He added that growing public opposition to data centers could further restrict supply, even as demand continues to surge.
Blackstone's private wealth assets under management rose 15% year over year to a record $330 billion, supported by nearly $9 billion in quarterly sales.
BXP reached $29 billion in net asset value in less than three years, generating an 18% annualized net return since inception.
BREIT's assets increased 9% to $58 billion, while regular-way net flows reached their strongest level in four years. Its largest share class delivered approximately 11% in net returns over the trailing 12 months.
BX Infra generated $1.1 billion in quarterly sales, lifting net asset value above $7 billion. Its largest share class posted a 17% annualized net return.
Meanwhile, BXHF raised approximately $400 million, including subscriptions received Oct. 1.
Blackstone also launched BXPM outside the United States and introduced investment products through partnerships with Wellington and Vanguard.
Blackstone's insurance-channel assets increased 14% year over year to more than $300 billion across 40 clients.
Investment-grade private credit assets rose 24% to nearly $150 billion, while direct-lending assets increased 10% to almost $170 billion.
However, redemption pressures emerged in its flagship private credit vehicle, BCRED.
The fund generated nearly $750 million in third-quarter gross sales, but repurchase requests reached 10% of net asset value, twice its quarterly 5% limit.
Blackstone fulfilled approximately half of those requests, resulting in $1.4 billion in net outflows.
Institutional assets under management grew 7%, while the firm's infrastructure platform expanded 40% to $97 billion. BXMA assets climbed 22% to $114 billion.
Blackstone also raised more than $16 billion toward its $22 billion secondaries fund target.
Its $8.7 billion BETP5 fund reached its fundraising ceiling, exceeding its predecessor's size by more than 50%. A separate $4.2 billion asset-based finance vehicle is also approaching its fundraising limit.
The firm plans to launch a larger energy transition and infrastructure credit fund.
Looking ahead, Blackstone expects base management fees to return to double-digit year-over-year growth in 2027.
The outlook reflects new private equity funds, expanding perpetual investment strategies and continued growth in credit, insurance and BXMA.
Management also expects net realizations to increase significantly in the fourth quarter, supported by planned portfolio company sales.
Additionally, BXMA and several credit strategies are expected to generate performance revenue from annual crystallization events.
Blackstone expects leasing activity across its global data center platform to triple in 2026. Data centers and logistics now account for 54% of its real estate portfolio.
However, management warned that geopolitical tensions, inflation, elevated oil prices, higher bond yields and uncertainty surrounding AI investment and private credit could weigh on markets.
BX Price Action: Blackstone shares were up 6.50% at $116.69 at the time of publication on Thursday, according to market data.
Real-time alerts on price moves, news, and trading opportunities.
Join 20,000+ investors. No spam, ever.
