Blackstone Group (NYSE: BX) reported a 27% jump in earnings for the first quarter of 2019 helped by higher total revenues. The results exceeded analysts’ expectations. The company announced conversion from a publicly traded partnership to a corporation.
Net income climbed by 27% to $1.07 billion and earnings soared by 34% to $0.71 per share. Net income attributable to the company surged by 31% to $481.3 million.
Total revenues grew by 14% to $2.02 billion driven by higher management and advisory fees, a 9% increase in investment income and higher interest and dividend revenue.
Total assets under management increased by 14% year-over-year to $511.8 billion driven by $125.7 billion of inflows despite $36.1 billion of realizations during the last twelve months. Fee-earning AUM of $353 billion was up 2% year-over-year as $71.6 billion of inflows outpaced $66.7 billion of realizations and outflows.
In addition, the company announced the compelling next step in Blackstone’s evolution as a public company, its conversion to a corporation. This is expected to be effective on July 1, 2019. Executive chief Stephen Schwarzman believes the decision to convert will make it significantly easier for both domestic and international investors to own its stock and should drive greater value for all of its shareholders over time.
AUM in Real Estate increased by 17% to a record $140.3 billion with inflows of $5 billion in the first quarter. In Private Equity, AUM jumped by 43% to $159 billion with quarterly inflows of $28.5 billion. In Credit, AUM decreased by 5% to $132.3 billion with quarterly inflows of $6.8 billion.
In Hedge Fund Solutions, AUM rose by 2% to $80.2 billion, helped by platform diversification, growth, and appreciation in customized strategies and individual investor and specialized solutions.
At March 31, 2019, Blackstone had $4.1 billion in total cash, cash equivalents, and corporate treasury investments and $9.9 billion of cash and net investments, or $8.27 per unit. Blackstone had no net debt, a $1.6 billion undrawn credit revolver and maintains A+/A+ ratings. On April 10, 2019, Blackstone issued EUR 600 million of 10-year notes at 1.5% coupon.
The company declared a quarterly distribution of $0.37 per common unit. The distribution will be payable on May 6, 2019, to stockholders of record as of April 29, 2019.
Shares of Blackstone ended Wednesday’s regular session up 0.39% at $35.93 on the NYSE. Following the earnings release, the stock inched up over 9% in the premarket session.