Blackstone’s revenue surge as a result of robust asset gross sales
© Reuters. FILE PHOTO: Blackstone CEO Steve Schwarzman speaks to a newsmaker
By Chibuike Oguh
NEW YORK (Reuters) – Blackstone Group (NYSE 🙂 Inc, the world’s largest alternative asset manager, announced Wednesday that distributable earnings were up 60% year over year in the fourth quarter, reflecting an increase in sales of assets in the private sector is attributable to the stocks and real estate divisions.
Distributable earnings – cash used to pay dividends to shareholders – were $ 1.46 billion, compared with $ 914 million a year earlier. This resulted in distributable earnings per share of $ 1.13, beating analysts’ average estimate of 89 cents, according to financial data provider Refinitiv. Blackstone’s stock rose 3% to $ 66.78 on Wednesday in New York.
“You are entering 2021 with significant momentum, especially in the insurance space,” said JMP analyst Devin Ryan.
“There can be short-term market volatility and short-term performance risk, but you are well positioned to find your way around since we have just passed a real-life stress test.” During the quarter, Blackstone completed the $ 14.6 billion sale of BioMed Realty Trust, America’s largest private owner of medical office buildings, and its 36% stake in UK insurer and annuity company Rothesay Life. A sharp surge in investment income resulted in Blackstone’s GAAP net income of $ 748.9 million, up 55% year over year.
Blackstone announced that its private equity portfolio was up 10.6% for the quarter, compared to a 11.7% increase in the benchmark index over the same period. Opportunistic and core real estate funds rose 4.3% and 5.5%, respectively.
On Tuesday, Blackstone agreed to take over most of the life insurance business of US insurer Allstate Corp (NYSE 🙂 for $ 2.8 billion. The deal is expected to add $ 28 billion to Blackstone’s assets under management. Blackstone expects further deals with insurance companies given the low interest rates. “What drives us and a number of companies in our industry is the extremely low interest rates that create the need for higher returns on insurance company assets,” said Stephen Schwarzman, chief executive of Blackstone, on a conference call with analysts on Wednesday. Blackstone’s total assets under management rose to $ 618.6 billion from $ 584.4 billion in the previous quarter, driven by strong fundraising. It ended the quarter with $ 147.7 billion in unspent capital.
Blackstone said it would pay a quarterly dividend of 96 cents per share.
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