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Blackstone Inc BX

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Solid Flows and Market Gains Lift Blackstone's Q3 Results; Increasing FVE to $120 Per Share

Greggory Warren, CFA Sector Strategist

Analyst Note

| Greggory Warren, CFA |

While there was little in narrow-moat Blackstone's third-quarter results that would alter our long-term view of the firm, we are increasing our fair value estimate to $120 per share from $115 to account for improvements in our near- to medium-term forecasts since our last update. Blackstone closed out the September quarter with $528.4 billion in fee-earning AUM, up 5.9% sequentially and 18.9% on a year-over-year basis (and higher than our forecast of $521.1 billion). Adjusted net inflows of $22.1 billion during the quarter were higher than out forecast for $13.1 billion as the company put more capital to work than we were anticipating. This sets the company up well to close out the year with organic fee-earning AUM growth in the low double digits (well above our forecast for average annual organic long-term AUM growth of 4%-6%). The bulk of the inflows were driven by Blackstone's real estate ($8.5 billion) and credit and insurance ($8.3 billion) segments, with most of the remainder coming from its private equity platform ($4.9 billion).

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Company Profile

Business Description

Blackstone is one of the world's largest alternative asset managers with $684 billion in total asset under management, including $499 billion in fee-earning asset under management, at the end of June 2021. The company has four core business segments: private equity (27% of fee-earning AUM, and 31% of base management fees, during 2020); real estate (32% and 39%); credit & insurance (25% and 15%); and hedge fund solutions (16% and 15%). While the firm primarily serves institutional investors (87% of AUM), it does serve clients in the high-net-worth channel (13%). Blackstone operates through 25 offices located in the Americas (8), Europe and the Middle East (9), and the Asia-Pacific region (8).

345 Park Avenue
New York, NY, 10154
T +1 212 583-5000
Sector Financial Services
Industry Asset Management
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 3,165