Blackstone(BX) - 2024 Q2 - Quarterly Results

Blackstone Reports Second Quarter 2024 Results Blackstone's Q2 2024 results highlight strong capital activity, strategic investments in digital and energy infrastructure, and a declared dividend Executive Summary Blackstone reported strong Q2 capital activity, including nearly $40 billion in inflows and $34 billion in deployment, with strategic investments in digital and energy infrastructure for AI, and declared a $0.82 per share dividend - Inflows reached nearly $40 billion, and deployment was $34 billion, marking the highest investment activity in two years[2] - The company is strategically investing in digital and energy infrastructure to capitalize on the growth driven by artificial intelligence[2] - A quarterly dividend of $0.82 per share was declared, payable on August 5, 2024, to record holders as of July 29, 2024[3] GAAP Financial Results Blackstone reported Q2 2024 GAAP Net Income of $948 million, a decrease from the prior year, with total revenues remaining relatively flat at approximately $2.8 billion Q2 2024 GAAP Financial Performance | Metric | 2Q'24 | 2Q'23 | | :--- | :--- | :--- | | Total Revenues | $2,796 million | $2,815 million | | Net Income | $948 million | $1,204 million | | Net Income Attributable to Blackstone Inc. | $444 million | $601 million | | Diluted Net Income Per Share | $0.58 | $0.79 | - Year-to-date GAAP Net Income for 2024 was $2.5 billion, a significant increase from $1.4 billion in the first half of 2023[8][9] Key Financial & Capital Metrics In Q2 2024, Blackstone generated $1.1 billion in Fee Related Earnings and $1.3 billion in Distributable Earnings, with Total Assets Under Management growing to $1.076 trillion and increased share repurchase authorization Q2 2024 Key Performance Metrics | Metric | Q2 2024 Value | LTM Value | | :--- | :--- | :--- | | Fee Related Earnings (FRE) | $1.1 billion ($0.91/share) | $4.4 billion ($3.64/share) | | Distributable Earnings (DE) | $1.3 billion ($0.96/share) | $5.1 billion ($3.99/share) | | Total AUM | $1,076.4 billion | - | | Inflows | $39.4 billion | $151.5 billion | | Deployment | $33.7 billion | $101.8 billion | | Realizations | $23.5 billion | $69.1 billion | - Total AUM increased by 7% year-over-year to $1.076 trillion, while Fee-Earning AUM grew 11% to $808.7 billion[10][11] - The company repurchased 2.0 million common shares in the quarter and increased its share repurchase authorization to $2.0 billion[10] Investment Performance and Capital Metrics Blackstone's Q2 2024 investment performance varied, with Infrastructure appreciating 6.3% and Private Credit returning 4.2%, supported by robust capital activity and $181.0 billion in dry powder Q2 2024 Investment Performance (Appreciation / Gross Returns) | Strategy | 2Q'24 | LTM | | :--- | :--- | :--- | | Real Estate - Opportunistic | 0.3% | (5.3)% | | Real Estate - Core+ | 0.1% | (3.1)% | | Private Equity - Corporate | 2.0% | 11.3% | | Infrastructure | 6.3% | 21.6% | | Private Credit | 4.2% | 18.1% | | Liquid Credit | 1.9% | 11.4% | - Net Accrued Performance Revenues rose to $6.2 billion ($5.08/share) at the end of the quarter[12][14] - Total undrawn capital (Dry Powder) available for future investments is $181.0 billion, with the largest portion in Private Equity ($79.4 billion) and Real Estate ($59.5 billion)[20] Segment Highlights This section details the performance and key metrics across Blackstone's core investment segments Segment Distributable Earnings Composition In Q2 2024, Total Segment Distributable Earnings reached $1.4 billion, primarily driven by strong contributions from Real Estate and Private Equity segments Q2 2024 Segment Distributable Earnings | Segment | Q2 2024 DE ($M) | LTM DE ($M) | | :--- | :--- | :--- | | Real Estate | $517 million | $2,224 million | | Private Equity | $486 million | $1,919 million | | Credit & Insurance | $354 million | $1,262 million | | Multi-Asset Investing | $63 million | $317 million | | Total | $1,419 million | $5,722 million | Real Estate The Real Estate segment's AUM grew 1% to $336.1 billion, with $9.8 billion deployed, though Segment Distributable Earnings decreased 19% due to lower Fee Related Performance Revenues - Key deployments included the privatizations of Apartment Income REIT Corp. and Tricon Residential[22] Real Estate Segment Performance (Q2 2024 vs Q2 2023) | Metric | 2Q'24 | % Change YoY | | :--- | :--- | :--- | | Total AUM | $336.1 billion | +1% | | Segment DE | $516.5 million | -19% | | Fee Related Earnings | $481.3 million | -18% | | Capital Deployed | $9.8 billion | - | | Realizations | $5.5 billion | - | - Appreciation was modest, with Opportunistic funds up 0.3% and Core+ funds up 0.1% for the quarter[22] Private Equity The Private Equity segment's AUM increased 8% to $330.6 billion, deploying $11.3 billion, and Segment Distributable Earnings grew 16% driven by a 73% increase in Realized Performance Revenues - Deployed $11.3 billion in investments including Adevinta, Civica, and Tropical Smoothie Cafe, and committed an additional $9.2 billion to companies like CoreWeave[24] Private Equity Segment Performance (Q2 2024 vs Q2 2023) | Metric | 2Q'24 | % Change YoY | | :--- | :--- | :--- | | Total AUM | $330.6 billion | +8% | | Segment DE | $485.8 million | +16% | | Fee Related Earnings | $278.1 million | +1% | | Realized Perf. Revenues | $381.8 million | +73% | - Corporate Private Equity funds appreciated 2.0% in the quarter, while Infrastructure funds appreciated 6.3%[24] Credit & Insurance The Credit & Insurance segment's AUM grew 14% to $330.1 billion with $18.6 billion in inflows, and Segment Distributable Earnings surged 51% due to strong Fee Related Earnings and Net Realizations - Inflows were strong at $18.6 billion, including $8.3 billion for the global direct lending strategy and $3.4 billion raised for BCRED[26] Credit & Insurance Segment Performance (Q2 2024 vs Q2 2023) | Metric | 2Q'24 | % Change YoY | | :--- | :--- | :--- | | Total AUM | $330.1 billion | +14% | | Segment DE | $354.1 million | +51% | | Fee Related Earnings | $297.1 million | +29% | | Realized Perf. Revenues | $91.2 million | +115% | - Private Credit generated a gross return of 4.2% (3.2% net) and Liquid Credit had a gross return of 1.9% (1.8% net) for the quarter[26] Multi-Asset Investing The Multi-Asset Investing segment's AUM rose 7% to $79.6 billion, with its Absolute Return Composite outperforming the HFRX Global Hedge Fund Index, and Segment Distributable Earnings increasing 17% - The Absolute Return Composite's gross return of 2.1% significantly outperformed the HFRX Global Hedge Fund Index return of 0.4% for the quarter[29] Multi-Asset Investing Segment Performance (Q2 2024 vs Q2 2023) | Metric | 2Q'24 | % Change YoY | | :--- | :--- | :--- | | Total AUM | $79.6 billion | +7% | | Segment DE | $63.0 million | +17% | | Fee Related Earnings | $54.6 million | +12% | | Realized Perf. Revenues | $16.4 million | +199% | Supplemental Details This section provides additional financial details, including AUM rollforward, balance sheet information, and investment fund performance records Assets Under Management Rollforward Total AUM increased 1% to $1.076 trillion in Q2 2024, driven by $39.4 billion in inflows, while Fee-Earning AUM grew 3% to $808.7 billion with strong net flows Total AUM Rollforward - Q2 2024 ($ in millions) | Category | Real Estate | Private Equity | Credit & Insurance | Total | | :--- | :--- | :--- | :--- | :--- | | Beginning Balance | $339,332 million | $320,810 million | $322,526 million | $1,061,263 million | | Inflows | $5,923 million | $12,102 million | $18,648 million | $39,377 million | | Realizations | ($5,454 million) | ($7,823 million) | ($9,518 million) | ($23,460 million) | | Market Activity | ($63 million) | $6,390 million | $3,187 million | $11,051 million | | Ending Balance | $336,100 million | $330,590 million | $330,117 million | $1,076,372 million | Fee-Earning AUM Rollforward - Q2 2024 ($ in millions) | Category | Real Estate | Private Equity | Credit & Insurance | Total | | :--- | :--- | :--- | :--- | :--- | | Beginning Balance | $301,584 million | $179,354 million | $229,351 million | $781,398 million | | Inflows | $6,744 million | $26,998 million | $16,889 million | $53,043 million | | Ending Balance | $299,066 million | $200,487 million | $237,286 million | $808,657 million | Deconsolidated Balance Sheet and Shareholder Returns As of June 30, 2024, Blackstone held $8.7 billion in cash and investments, maintained strong credit ratings, declared a $0.82 dividend, and repurchased 2.0 million common shares - Blackstone has $8.7 billion in total cash, cash equivalents, corporate treasury, and other investments, and maintains A+/A+ ratings from S&P and Fitch[35][38] Deconsolidated Financial Position (June 30, 2024) | Item | Amount ($M) | | :--- | :--- | | Cash and Cash Equivalents | $2,381 million | | Corporate Treasury and Other Investments | $6,367 million | | Net Accrued Performance Revenues | $6,214 million | | Cash and Net Investments | $17,668 million | | Outstanding Debt (at par) | $10,683 million | - Declared a quarterly dividend of $0.82 per common share, based on $0.96 of Distributable Earnings per common share for Q2 2024[46] - Repurchased 2.0 million common shares in Q2 and increased the share repurchase authorization to $2.0 billion[48] Investment Fund Performance Records Blackstone's flagship funds, including BREP and BCP, have consistently delivered strong net IRRs of 15%, while perpetual capital strategies like BREIT and BCRED show annualized total net returns of 10% or more since inception Selected Drawdown Fund Family Performance (Net IRR) | Fund Family | Total Net IRR | | :--- | :--- | | Total Global BREP (Real Estate) | 15% | | Total BREP Europe | 11% | | Total BREP Asia | 8% | | Total Corporate Private Equity | 15% | | Total Tactical Opportunities | 12% | | Total Credit Drawdown Funds | 10% | Selected Perpetual Capital Strategies Performance (Annualized Total Net Return) | Strategy | Inception Year | Total Net Return | | :--- | :--- | :--- | | BREIT (Core+ Real Estate) | 2017 | 10% | | BIP (Infrastructure) | 2019 | 16% | | BCRED (U.S. Direct Lending) | 2021 | 10% | Reconciliations and Definitions This section provides detailed reconciliations of GAAP to non-GAAP financial measures and defines key operating metrics and dividend policy Reconciliation of GAAP to Non-GAAP Measures This section details the adjustments from GAAP Net Income to non-GAAP measures like Distributable Earnings and Fee Related Earnings, accounting for unrealized items and consolidation effects - A detailed reconciliation from GAAP Net Income to Distributable Earnings is provided, showing adjustments for unrealized gains/losses, equity-based compensation, and consolidation impacts[52] - Fee Related Earnings (FRE) is derived by adjusting Total Segment Distributable Earnings for realized performance revenues, realized performance compensation, and realized principal investment income[52] Key Definitions and Dividend Policy Blackstone defines its core non-GAAP metrics, including Segment Distributable Earnings, Distributable Earnings, and Fee Related Earnings, and outlines its dividend policy targeting approximately 85% payout of Distributable Earnings - Distributable Earnings (DE) is a key metric used to assess performance and amounts available for dividends, representing the sum of Segment DE and Net Interest/Dividend Income, less Taxes and Related Payables[66] - Fee Related Earnings (FRE) measures profits from recurring revenue streams and is not subject to future realization events[66] - The dividend policy targets paying approximately 85% of Blackstone Inc.'s share of Distributable Earnings, though the final amount is at the discretion of the board of directors[68]