Blackstone And KKR Comparison

 

Blackstone Inc's net profit margin is 22 % on average for the last five years, while KKR & Co, Inc's net profit margin is 15 % for the last five years. Blackstone's dividend yield is 2.02 %, while KKR's is 0.47 %. Blackstone's Price/Earnings and Price/Ratios are significantly higher at 58.73 and 28 for 2023 compared with KKR's 45.66 and 7 for 2023. Blackstone is overvalued relative to KKR, according to Wolfteam Ltd.'s projections and estimates.

Blacktone, the leading alternative asset manager's assets under management are 1.1076 trillion USD with fee-earning assets under management of 820.5 billion USDs. Blackstone manages so called perpetual capital of 434.7 billion USDs. Such capital constitutes insurance fee premiums from Blackstone's proprietary owned insurance business. Such insurance premiums are stable, long-term in nature capital. That is why these 434.7 billion USDs of Blackstone's asset under management are called perpetual capital.

Blackstone's Real Estate assets under management:

Total AUM: $325.1 billion with inflows of $5.8 billion in the quarter and $39.8 billion over the LTM.

Blackstone's private equity assets under management:

Total AUM: Increased 12% to $344.7 billion with inflows of $10.2 billion in the quarter and $36.9 billion over the LTM.

Blackstone's credit and insurance assets under management:

Total AUM: Increased 22% to $354.7 billion with inflows of $21.4 billion in the quarter and $80.2 billion over the LTM.

MULTI-ASSET INVESTING
▪ Total AUM: Increased 9% to $83.1 billion with inflows of $3.1 billion in the quarter and $9.9 billion over the LTM.

KKR's third quarter results summary:

Assets Under Management (“AUM”) of $624 billion, up 18% year-over-year
• Fee Paying Assets Under Management (“FPAUM”) of $506 billion, up 19% year-over-year
• New Capital Raised of $24 billion in the quarter and $118 billion in the LTM
• Capital Invested of $24 billion in the quarter and $77 billion in the LTM

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Assets Under Management
• AUM of $624 billion, up 18% year-over-year, with $24 billion of organic new capital raised in the quarter and $118 billion in the
LTM
• Fee Paying AUM of $506 billion, up 19% year-over-year, with $25 billion of organic new capital raised in the quarter and $122
billion in the LTM
• Perpetual Capital of $259 billion, up 27% year-over-year driven primarily by the organic growth of Global Atlantic. Perpetual
capital represents 42% of AUM and 50% of FPAUM

KKR has 259 billion USDs of so called perpetual assets under management sourced from its insurance and retirement subsidiary Global Atlantic which is proprietary owned by KKR. Such insurance premiums coming from Global Atlantic are long-term in nature and can be invest for the long-term.

Dry Powder: Uncalled commitments of $108 billion remain diversified across the firm’s investment strategies
• AUM Not Yet Paying Fees: At quarter end, there was $53 billion of committed capital with a weighted average management fee
rate of approximately 90 bps that becomes payable when the capital is either invested or enters its investment period
• Carry Eligible AUM: Of the $306 billion of carried interest eligible AUM, $221 billion is above cost and accruing carry
• Performance Fee Eligible AUM: $371 billion, up 13% year-over-year

KKR segments.

Private Equity:

AUM: Increased 3% quarter-over-quarter and increased 10% year-over-year to $190 billion with organic new capital raised of $2 billion in the quarter and $8 billion YTD
• New capital raised in the quarter was primarily driven by K-Series PE, private equity vehicles designed for private wealth
clients
• Ascendant, our first-time U.S. middle market traditional private equity fund, held its final close bringing the fund's total
commitments to $4.3 billion
• Realizations: Carried Interest in 3Q driven primarily by traditional private equity secondary sales and onshore K-Series investment
performance
• Capital Invested: $6 billion in the quarter and $10 billion YTD. In 3Q, deployment was driven primarily by traditional private
equity in the U.S. alongside an increase in activity globally. Deployment included a significant increase in activity by technology
growth
• Performance: The traditional private equity portfolio appreciated 17% in the LTM

Real Estate:

UM: Increased 7% quarter-over-quarter and 31% year-over-year to $163 billion with organic new capital raised of $10 billion in
the quarter and $34 billion YTD
• New capital raised in the quarter was widespread and included Global Infrastructure V, Global Atlantic inflows, Global Climate,
Real Estate Americas IV and K-Series Infrastructure, infrastructure vehicles designed for private wealth clients
• Realizations: Carried Interest in 3Q largely driven by sales from global infrastructure and opportunistic real estate in the U.S.
• Capital Invested: $8 billion in the quarter and $22 billion YTD. In 3Q, deployment was primarily driven by infrastructure in both
Europe and the U.S. as well as U.S. real estate credit and equity
• Performance: The infrastructure portfolio appreciated 18% and the opportunistic real estate portfolio appreciated 3% in the LTM

Credit And Liquid Strategies:

AUM: Increased 3% quarter-over-quarter and 18% year-over-year to $271 billion with organic new capital raised of $11 billion in
the quarter and $44 billion YTD
• New capital raised in the quarter was primarily driven by inflows at Global Atlantic, opportunistic asset-based finance,
leveraged credit SMAs, CLO formation and K-Series Credit, a series of credit vehicles designed for private wealth clients
• AUM comprised of: $129 billion of leveraged credit, $66 billion of asset-based finance, $40 billion of direct lending, $8 billion
of strategic investments and $29 billion of liquid strategies
• Capital Invested: $10 billion in the quarter and $30 billion YTD. In 3Q, deployment was most active in high grade asset-based
finance and direct lending
• Performance: The leveraged credit composite appreciated 11% and the alternative credit composite appreciated 12% in the LTM

Here is Blackstone's earnings statement:

Blackstone | 1
BLACKSTONE’S THIRD QUARTER 2024 GAAP RESULTS
▪ GAAP Net Income was $1.6 billion for the quarter and $4.1 billion year-to-date (“YTD”). GAAP Net Income
Attributable to Blackstone Inc. was $781 million for the quarter and $2.1 billion YTD.
Throughout this presentation, all current period amounts are preliminary and unaudited. Totals may not add due to rounding. See pages 36-38, Definitions and
Dividend Policy, for definitions of terms used throughout this presentation. NCI means non-controlling interests.($ in thousands, except per share data) (unaudited) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD 3Q'23 LTM 3Q'24 LTM
Revenues
Management and Advisory Fees, Net 1,655,443$ 1,794,894$ 5,023,128$ 5,309,355$ 6,671,566$ 6,957,487$
Incentive Fees 158,801 191,794 454,754 559,434 665,018 799,851
Performance Allocations 390,486 1,569,673 894,647 3,322,003 841,443 2,959,529
Principal Investments 163,653 93,371 (782) 675,860 38,429 377,311
Interest and Dividend Revenue 109,133 109,774 348,123 312,612 450,755 480,986
Other 63,769 (96,312) 17,951 (31,861) (225,331) (142,741)
Total Revenues 2,541,285$ 3,663,194$ 6,737,821$ 10,147,403$ 8,441,880$ 11,432,423$
Expenses
Compensation and Benefits 946,186 1,440,344 2,769,892 3,954,850 3,429,221 4,497,928
General, Administrative and Other 279,186 340,945 827,614 1,022,823 1,119,954 1,312,514
Interest Expense 110,599 111,337 323,136 328,156 423,465 436,888
Fund Expenses 38,934 3,470 118,918 13,380 137,449 13,449
Total Expenses 1,374,905$ 1,896,096$ 4,039,560$ 5,319,209$ 5,110,089$ 6,260,779$
Other Income (Loss) (49,078)$ 42,842$ 104,373$ 70,009$ 73,038$ (118,361)$
Income Before Provision for Taxes 1,117,302$ 1,809,940$ 2,802,634$ 4,898,203$ 3,404,829$ 5,053,283$
Provision for Taxes 196,560 245,303 467,504 789,220 326,358 835,177
Net Income 920,742$ 1,564,637$ 2,335,130$ 4,108,983$ 3,078,471$ 4,218,106$
Redeemable NCI in Consolidated Entities (92,577) (22,184) (81,589) (61,595) (281,179) (225,524)
Non-Redeemable NCI in Consolidated Entities 461,325 805,986 1,177,639 2,097,943 1,562,716 2,219,195
Net Income Attributable to Blackstone Inc. (''BX'') 551,994$ 780,835$ 1,239,080$ 2,072,635$ 1,796,934$ 2,224,435$
Net Income Per Share of Common Stock, Basic 0.73$ 1.02$ 1.64$ 2.71$ 2.39$ 2.91$
Net Income Per Share of Common Stock, Diluted 0.73$ 1.02$ 1.64$ 2.71$ 2.39$ 2.91

Here is KKR's income statement:

$ in thousands, except per share data) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD
Revenues
Asset Management and Strategic Holdings $ 1,665,012 $ 2,269,090 $ 4,242,390 $ 5,786,007
Insurance 1,650,469 2,522,606 5,827,091 12,834,337
Total Revenues $ 3,315,481 $ 4,791,696 $ 10,069,481 $ 18,620,344
Expenses
Asset Management and Strategic Holdings $ 1,168,348 $ 1,778,343 $ 2,950,149 $ 4,619,272
Insurance 1,147,175 2,898,662 5,347,939 13,317,006
Total Expenses $ 2,315,523 $ 4,677,005 $ 8,298,088 $ 17,936,278
Total Investment Income (Loss) - Asset Management and Strategic Holdings $ 1,819,232 $ 1,598,873 $ 2,907,245 $ 3,602,754
Income Tax Expense (Benefit) 437,210 224,896 910,912 711,066
Redeemable Noncontrolling Interests (3,685) (4,798) (12,728) 57,546
Noncontrolling Interests 895,539 838,916 1,088,622 1,513,518
Preferred Stock Dividends 17,248 — 51,747 —
Net Income (Loss) - KKR Common Stockholders $ 1,472,878 $ 654,550 $ 2,640,085 $ 2,004,690
Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock
Basic $ 1.71 $ 0.74 $ 3.06 $ 2.26
Diluted $ 1.64 $ 0.69 $ 2.95 $ 2.15
Weighted Average Shares of Common Stock Outstanding
Basic 862,123,088 887,444,991 861,598,674 886,618,138
Diluted 909,056,980 941,967,479 911,716,705 933,079,377

Blackstone has stronger momentum and profitability than KKR. Both Blackstone and KKR are investing heavily in infrastructure.

All in all, however, Blackstone seems overvalued compared to KKR, in Wolfteam Ltd.'s view.