We hold Blackstone in the International Equities Portfolio, and they delivered a strong 2Q result overnight, with earnings, inflows and realisations all comfortably ahead of expectations. The stock has been weak leading into this result, and while it saw only a modest gain (+1.4%), the underlying fundamentals remain supportive.
Distributable earnings rose 26% to US$1.97 billion, or US$1.52 per share, versus consensus of US$1.33 and fee-related earnings increased 22% to US$1.78 billion.
Key highlights included:
- Assets under management of US$1.35 trillion, up 11%. – ahead of US$1.33 trillion consensus
- Quarterly inflows of US$68.3 billion, well ahead of expectations.
- Realisations of US$31.8 billion.
- Deployment of US$34.2 billion.
- Dry powder of US$228.1 billion.
- Infrastructure returns of 7.2% for the quarter.
The clear driver was Blackstone’s early move into AI infrastructure, and this is one of the key reasons we own the stock. Nine of its ten best-performing investments were linked to data centres, power, energy or large language models, while the US$3.5 billion sale of data-centre assets to Digital Realty helped lift real estate performance revenue to its highest level in four years.
Management also expects base management fee growth to return to double digits in 2027, supported by new private equity funds, stabilising real estate, infrastructure and private wealth. The softer area was credit and insurance, where distributable earnings fell 6%, although the division still attracted US$31 billion of inflows.
- Overall, a high-quality result which shows BX is monetising its AI exposure through both investment gains and realisations, while strong inflows and a large pool of dry powder leave it well placed to keep deploying capital. We think BX remains a good way to play AI over the medium term.
MM remains long & bullish BX US
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