Blackstone Investments

 

Blackstone Inc., the worlds largest alternative asset manager active predominantly in private equity, real estate and credit and insurance has fully evolved into a quasi banking institution, a 'shadow bank' financing activities eschewed under heavy and punitive regulations by regular corporate, money center banks.

Blackstone, however has followed buying into insurance like its nearest competitors KKR Inc and Carlyle Group Inc, tempted by the long-term investment opportunities insurance premiums provide. Balckstone Inc, KKR Inc and Carlyle Group Inc use the long-term nature of insurance premiums to invest the insurance premiums they receive from their fully owned insurance business lines into their private equity, real estate and credit and lending businesses akin to the way Warren Buffett's controlled Berkshire Hathaway invests its insurance premiums into public stocks and the other business lines of Berkshire Hathaway like manufacturing, energy etc., according to Wolfteam Ltd.'s projections and estimates.

Here is an excerpt from Blackstone Inc.'s second quarter 2024 financial statement:

BLACKSTONE’S SECOND QUARTER 2024 SEGMENT EARNINGS
Fee Related Earnings per Share is based on end of period DE Shares Outstanding (see page 24, Share Summary). DE per Common Share is based on DE Attributable
to Common Shareholders (see page 23, Shareholder Dividends) and end of period Participating Common Shares outstanding. YTD FRE per Share and DE per
Common Share amounts represent the sum of the last two quarters. See pages 32-33 for the Reconciliation of GAAP to Total Segment Measures. Effective April 1,
2024, GP Stakes is included in the Private Equity segment as part of the Secondaries business and Harvest is included in the Multi-Asset Investing segment. See
note on page 34 for additional details on segment organizational updates.% Change % Change
($ in thousands, except per share data) 2Q'23 2Q'24 vs. 2Q'23 2Q'23 YTD 2Q'24 YTD vs. 2Q'23 YTD
Management and Advisory Fees, Net 1,703,186$ 1,779,938$ 5% 3,355,573$ 3,487,509$ 4%
Fee Related Performance Revenues 266,738 177,067 (34)% 414,982 472,568 14%
Fee Related Compensation (568,808) (552,913) (3)% (1,077,779) (1,106,990) 3%
Other Operating Expenses (257,366) (293,122) 14% (509,014) (582,100) 14%
Fee Related Earnings 1,143,750$ 1,110,970$ (3)% 2,183,762$ 2,270,987$ 4%
Realized Performance Revenues 388,423 542,889 40% 1,029,949 1,079,282 5%
Realized Performance Compensation (178,370) (251,057) 41% (474,394) (504,081) 6%
Realized Principal Investment Income (Loss) (7,461) 16,572 n/m 36,230 26,510 (27)%
Net Realizations 202,592 308,404 52% 591,785 601,711 2%
Total Segment Distributable Earnings 1,346,342$ 1,419,374$ 5% 2,775,547$ 2,872,698$ 4%
Distributable Earnings 1,212,072$ 1,252,221$ 3% 2,461,164$ 2,518,599$ 2%
Additional Metrics:
Net Income Per Share of Common Stock, Basic 0.79$ 0.58$ (27)% 0.91$ 1.69$ 86%
FRE per Share 0.94$ 0.91$ (3)% 1.80$ 1.86$ 3%
DE per Common Share 0.93$ 0.96$ 3% 1.90$ 1.94$ 2%
Total Segment Revenues 2,350,886$ 2,516,466$ 7% 4,836,734$ 5,065,869$ 5%
Total Assets Under Management 1,001,355,959$ 1,076,371,811$ 7% 1,001,355,959$ 1,076,371,811$ 7%
Fee-Earning Assets Under Management 731,145,065$ 808,656,801$ 11% 731,145,065$ 808,656,801$ 11%

Blackstone Inc.'s strategy of using insurance premiums to invest for the long-term seems to be paying off for Blackstone, which sports 193 billion USDs market capitalization.