Blackstone Becomes First Asset Manager to Hold $1 Trillion in Assets, Wall Street Plays It Cool
Key takeaways
- Asset manager Blackstone has reached $1 trillion in assets
- The bulk of the gains come from a successful real estate and insurance investment strategy
- The stock was down 2% despite the announcement, as Blackstone’s earnings report left investors disappointed
Blackstone, an alternative investment manager that has fingers in many pies, has become the first alternative asset management company to cross $1 trillion in assets under management. That’s a seriously big milestone for a company that started with just $400,000 in seed capital — but Wall Street, focused on the earnings beat instead, wasn’t impressed. Here’s what went down.
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What’s the latest with Blackstone?
Investment conglomerate Blackstone just reached a major milestone — it’s the first company that isn’t an investment bank to hit $1 trillion worth of assets under its management.
Blackstone now manages more assets than Goldman Sachs — which, well, is known for this thing. Blackstone’s market value is also now $10 billion higher than the investment bank. It’s only one of 20 companies that have reached the exclusive club.
How did it go about it? Blackstone has been investing heavily in real estate, with the Blackstone Real Estate Income Trust owning swathes of rental housing, data centers and commercial properties.
The company’s also ventured into the insurance industry, having acquired insurance business Allstate for $3 billion in 2021, which has helped to further the push to $1 trillion. Blackstone had initially set the target for 2026, so reaching it three years ahead of schedule is impressive indeed.
What was the market reaction?
Despite the landmark news, a so-so earnings beat for Blackstone pushed the stock into the negative. The company recorded distributable earnings for dividends at 93 cents a share, which narrowly beat analyst expectations but is a 40% decline from the previous year.
Blackstone’s share price fell by 2% on Thursday, but investors should take heart that the stock has gained 37.8% since the start of the year. There are also rumors swirling about Blackstone being included in the S&P 500 soon, thanks to a relaxing of the criteria in April.
The bottom line
Blackstone has beaten the odds to become one of the biggest and most successful companies on the planet. Investors might be in the doldrums about the Q2 earnings beat — but only because the expectations on Blackstone are so high. Nobody doubts the business’ longevity, especially once the deal-making drought ends.
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