Blackstone Inc. reported a 25% jump in distributable earnings for the second quarter, buoyed by profits from its retail and evergreen funds.
A private equity vehicle for wealthy investors and Blackstone’s big property trust were among funds that generated a burst of incentive fees for the world’s largest alternative asset manager.
Those so-called perpetual funds take such fees without having to actually cash out of bets — a break from the traditional private equity playbook — as long as they deliver sufficient paper gains to meet minimum thresholds.
That sent so-called “fee-related performance revenues” skyrocketing 167% from a year earlier, Blackstone said Thursday in a statement.
The $472 million windfall mitigated the pain that has been dogging Blackstone and its rivals on another front: Dealmakers are still struggling to profitably cash out of investments they made during an era of extremely low interest rates.
It’s a reminder of how Blackstone’s retail machine provides ballast for the firm during a sluggish stretch for dealmaking amid higher rates and President Donald Trump’s trade wars.
Blackstone President Jon Gray touted the perpetual fund business as a source of strength in a lackluster dealmaking climate.
“It has given us the capability to have significant incentive fee earnings in a more challenging realization environment,” he said. “It all speaks to the breadth of what we have.”
Distributable earnings, or profit available to shareholders, rose to $1.57 billion, or $1.21 a share, beating the $1.10 average estimate of analysts surveyed by Bloomberg.
Blackstone shares rose about 3.6% in early trading Thursday.
