Key Takeaways
- • Blackstone reported adjusted third-quarter EPS of $1.32, beating the $1.26 consensus, while revenue of $3.217 billion missed the $3.280 billion estimate.
- • Assets under management rose 10% year over year to a record of approximately $1.4 trillion, with $63 billion in quarterly inflows and trailing 12-month inflows above $270 billion.
- • CEO Stephen Schwarzman warned that AI computing demand is intensifying a severe supply shortage, saying "Seldom in my career have I seen such a supply-constrained market of this scale."
- • Private wealth AUM climbed 15% to a record $330 billion, but BCRED faced repurchase requests at 10% of NAV, twice its 5% quarterly limit, with Blackstone fulfilling about half and recording $1.4 billion in net outflows.
- • Distributable earnings fell 9% year over year to $1.72 billion on lower investment realizations, and management expects base management fees to return to double-digit growth in 2027.
Summary
Blackstone Inc. (BX) shares rose Thursday after the alternative asset manager reported third-quarter results that beat earnings expectations but fell short on revenue. Adjusted earnings were $1.32 per share against a $1.26 consensus, while revenue totaled $3.217 billion versus a $3.280 billion estimate. Distributable earnings fell 9% year over year to $1.72 billion, reflecting lower investment realizations, though fee-related earnings rose 6% to $1.6 billion. Total fee revenue increased 8% to $2.7 billion, with base management fees reaching a quarterly record of $2 billion, and transaction and advisory fees jumped 34% to $210 million.
Assets under management increased 10% year over year to approximately $1.4 trillion, a record. The firm attracted $63 billion in quarterly inflows, bringing trailing 12-month inflows above $270 billion, the highest level in four years. Net realizations declined 20% from the prior quarter, consistent with management's expectations.
On the earnings call, CEO Stephen Schwarzman warned that accelerating AI computing demand is intensifying an already severe supply shortage, and that growing public opposition to data centers could further restrict supply. Blackstone identified AI infrastructure as a major growth area, citing shortages of data centers, electricity and equipment. The firm launched Crux with Google to address computing capacity shortages, partnered with Anthropic through ODE, and was selected by NVIDIA among a small group of managers to support $500 billion in GPU financing. Blackstone is also expanding investments in power generation, transmission and storage; its credit business financed roughly 15% of U.S. solar and storage projects last year.
Private wealth AUM rose 15% to a record $330 billion, supported by nearly $9 billion in quarterly sales. BREIT's assets increased 9% to $58 billion, and BX Infra's net asset value topped $7 billion. Private credit showed mixed results: insurance-channel assets rose 14% to more than $300 billion, and investment-grade private credit grew 24% to nearly $150 billion. However, BCRED received repurchase requests equal to 10% of net asset value against a 5% quarterly limit, and Blackstone fulfilled approximately half, resulting in $1.4 billion in net outflows.
Looking ahead, Blackstone expects base management fees to return to double-digit growth in 2027 and anticipates a significant increase in fourth-quarter net realizations from planned portfolio company sales. Management cautioned that geopolitical tensions, inflation, elevated oil prices, higher bond yields and uncertainty around AI investment and private credit could weigh on markets. Blackstone shares were up 6.50% at $116.69 at the time of publication, according to Benzinga Pro data.
Assets under management increased 10% year over year to approximately $1.4 trillion, a record. The firm attracted $63 billion in quarterly inflows, bringing trailing 12-month inflows above $270 billion, the highest level in four years. Net realizations declined 20% from the prior quarter, consistent with management's expectations.
On the earnings call, CEO Stephen Schwarzman warned that accelerating AI computing demand is intensifying an already severe supply shortage, and that growing public opposition to data centers could further restrict supply. Blackstone identified AI infrastructure as a major growth area, citing shortages of data centers, electricity and equipment. The firm launched Crux with Google to address computing capacity shortages, partnered with Anthropic through ODE, and was selected by NVIDIA among a small group of managers to support $500 billion in GPU financing. Blackstone is also expanding investments in power generation, transmission and storage; its credit business financed roughly 15% of U.S. solar and storage projects last year.
Private wealth AUM rose 15% to a record $330 billion, supported by nearly $9 billion in quarterly sales. BREIT's assets increased 9% to $58 billion, and BX Infra's net asset value topped $7 billion. Private credit showed mixed results: insurance-channel assets rose 14% to more than $300 billion, and investment-grade private credit grew 24% to nearly $150 billion. However, BCRED received repurchase requests equal to 10% of net asset value against a 5% quarterly limit, and Blackstone fulfilled approximately half, resulting in $1.4 billion in net outflows.
Looking ahead, Blackstone expects base management fees to return to double-digit growth in 2027 and anticipates a significant increase in fourth-quarter net realizations from planned portfolio company sales. Management cautioned that geopolitical tensions, inflation, elevated oil prices, higher bond yields and uncertainty around AI investment and private credit could weigh on markets. Blackstone shares were up 6.50% at $116.69 at the time of publication, according to Benzinga Pro data.
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