Blackstone's Q1 profit rises on robust private equity, credit performance

Blackstone posted an 11 per cent jump in first-quarter profit on Thursday, driven by higher proceeds from asset sales across its private equity and credit businesses. 

Distributable earnings, which represent cash that can be used to pay dividends, grew to $1.41 billion, or $1.09 per share, for the three months ended March 31, compared with $1.27 billion, or 98 cents per share, a year earlier. 

Policy uncertainty under President Donald Trump, especially regarding tariffs, has led to choppy markets and dampened the appetite for deals a sharp reversal from earlier this year when hopes of deregulation had boosted enthusiasm. 

But Blackstone's results emphasize how large alternative asset managers can seize selective dealmaking opportunities even in a challenging environment.    

 

  "We are well positioned to navigate the current environment," Blackstone CEO Stephen Schwarzman said. Schwarzman, a longtime Trump backer, said last month tariffs could boost manufacturing capacity in the US, though that was before the full scope of the duties was revealed. 

Since then, several high-profile corporate executives have ramped up their recession warnings and urged the administration to negotiate trade deals. 

Blackstone drew in $61.64 billion of inflows in the quarter, which helped its assets under management climb 10 per cent to $1.17 trillion. 

About half of the inflows were directed into the credit and insurance segment, which offers a broad range of debt financing options to companies. 

The world's largest alternative asset manager has positioned itself as a key player in the private credit space. Companies looking for flexible financing options are increasingly turning to investment firms such as Blackstone instead of traditional banks. 

Blackstone's private equity arm also performed strongly, with segment distributable earnings rising 13 per cent to $564.6 million. The unit's results were helped by asset sales of $6.5 billion. 

The real estate arm, however, continued to be a drag, with AUM declining 6 per cent. Elevated interest rates have dampened the value of the portfolio. 

So far this year, Blackstone shares have dropped around 25 per cent, while peers Apollo Global and KKR have declined 24 per cent and 31 per cent, respectively.