Blackstone(US:BX)2025-05-02 20:01Economic Overview - Blackstone reported a total return of the S&P 500 index at (4.3)% for Q1 2025, with significant declines in consumer discretionary and information technology sectors of 13.8% and 12.7% respectively [269]. - The U.S. economy contracted by 0.3% in Q1 2025, down from a growth of 2.4% in Q4 2024, indicating a slowdown in economic activity [270]. - U.S. inflation decelerated to 2.4% in March 2025, down from a peak of 9.1% in June 2022 [270]. - The unemployment rate remained steady at 4.2% in March 2025, compared to 4.1% in December 2024 [271]. - Global markets experienced significant volatility in Q1 2025, influenced by U.S. trade policies and a weakening U.S. Dollar, with the 10-year U.S. Treasury yield decreasing by 36 basis points to 4.21% [268]. Financial Performance - Revenues for the three months ended March 31, 2025, were $3.3 billion, a decrease of $398.4 million (11%) compared to $3.7 billion for the same period in 2024 [308]. - Total Investment Income decreased by $469.2 million (29%) to $1.2 billion, primarily due to a $485.7 million decrease in Unrealized Investment Income [308]. - Total Expenses increased by $104.0 million (6%) to $1.9 billion, driven by a $123.5 million increase in Total Compensation and Benefits [309]. - Net Income for the three months ended March 31, 2025, was $1.2 billion, a decrease of $387.2 million (24%) compared to $1.6 billion in 2024 [308]. - The effective tax rate for the three months ended March 31, 2025, was 16.8%, compared to 15.1% for the same period in 2024 [312]. Assets Under Management - Total Assets Under Management includes both invested and available capital in Blackstone-managed or advised vehicles, with the measurement varying based on the structure and investment strategy of each vehicle [293]. - Total Assets Under Management increased to $1,167,461,910, reflecting a growth of 4% compared to the previous year [325]. - Fee-Earning Assets Under Management rose to $860,069,950, marking an increase of 4% year-over-year [325]. - The impact of foreign exchange rate fluctuations on Total Assets Under Management was $4.5 billion for the three months ended March 31, 2025 [327]. - Total Assets Under Management increased by $40.3 billion to $1,167.5 billion as of March 31, 2025, compared to $1,127.2 billion at December 31, 2024 [328]. Segment Performance - The Corporate Private Equity business focuses on control-oriented investments in high-quality companies, aiming for strong unlevered returns regardless of market cycles [254]. - The Blackstone Real Estate Partners (BREP) platform targets a broad range of opportunistic real estate investments, focusing on high-quality assets with outsized growth potential driven by global economic trends [248]. - The Blackstone Infrastructure Partners (BIP) strategy targets a diversified mix of core+, core, and public-private partnership investments across all infrastructure sectors [257]. - The Multi-Asset Investing segment is the world's largest discretionary allocator to hedge funds, seeking to deliver compelling risk-adjusted returns through public market strategies [264]. - Segment Distributable Earnings for Multi-Asset Investing were $55.7 million for the three months ended March 31, 2025, a 9% increase from $50.9 million in 2024 [410]. Compensation and Earnings - Distributable Earnings for the three months ended March 31, 2025, was impacted by an increase of $21.3 million in Realized Performance Compensation, which reduced Net Realizations and negatively affected Income Before Provision (Benefit) for Taxes and Distributable Earnings [284]. - Fee Related Earnings for Q1 2025 were $484.8 million, a decrease of $101.2 million compared to $586.1 million in Q1 2024, mainly due to a drop in Fee Related Performance Revenues [363]. - Management Fees, Net were $700.8 million for the three months ended March 31, 2025, a decrease of $19.6 million or 2.7% compared to $720.4 million for the same period in 2024 [365]. - Realized Performance Revenues decreased to $350.1 million for the three months ended March 31, 2025, down $99.8 million or 22% compared to $449.9 million for the same period in 2024 [382]. - Realized Performance Compensation was $171.1 million for the three months ended March 31, 2025, a decrease of $49.3 million or 22% compared to $220.5 million for the same period in 2024 [383]. Investment Strategies and Returns - The Credit & Insurance segment has benefited from high interest rates, although a decline in rates could impact future performance [393]. - Private Credit composite gross returns were 3% for the three months ended March 31, 2025, compared to 4% in 2024, while Liquid Credit composite gross returns decreased to 1% from 2% [404]. - The Absolute Return Composite achieved a gross return of 3% for the three months ended March 31, 2025, compared to 5% in 2024, with a one-year average annual return of 11% [421]. - The BXMT Total Net Return reflects an annualized market return of a shareholder invested since inception, with a significant focus on real estate debt strategies [358]. - The BIP Total Assets Under Management reached $59.0 billion, indicating strong institutional interest in infrastructure-focused funds [358].