Blackstone Is Undervalued On Private Equity Investments

 

Blackstone Inc., the global alternative investment firm has the largest private equity portfolio in the world with total assets under management of 1 127.2 billion USDs of which 352.2 billion is invested in private equity. 

Which makes Blackstone the largest private equity operator in the world. 444.8 billion USDs of the 1.127 trillion USDs Blackstone manages are in so called perpetual capital. That is it stems from stable insurance fee premiums coming from Blackstone's proprietary owned insurance business lines. These 444.8 billion USD of perpetual capital make for fertile environment of investing into private equity for the long-term 7-10 + years, which enables Blackstone to earn additional, on top investment returns on the standard private equity asset class and thus beat its competitors.

With its huge perpetual capital and private equity's excellent returns Blackstone is poised to unlock tens of billion of USDs of more value.

For the last 20 years private equity returns have often beaten the S&P 500 return.

Blackstone is poised to benefit handsomely from the current driven by regulation and reach for yield private markets boom, according to Wolfteam Ltd.'s projections and estimates.

Here i Blackstone's fourth quarter, calendar year 2024 earnings statement:

($ in thousands, except per share data) (unaudited) 4Q'23 4Q'24 FY'23 FY'24
Revenues
Management and Advisory Fees, Net 1,648,132$ 1,879,581$ 6,671,260$ 7,188,936$
Incentive Fees 240,417 404,744 695,171 964,178
Performance Allocations (362,474) 507,150 532,173 3,829,153
Principal Investments (298,549) 36,989 (299,331) 712,849
Interest and Dividend Revenue 168,374 98,547 516,497 411,159
Other (110,880) 155,554 (92,929) 123,693
Total Revenues 1,285,020$ 3,082,565$ 8,022,841$ 13,229,968$
Expenses
Compensation and Benefits 543,078 1,039,203 3,312,970 4,994,053
General, Administrative and Other 289,691 339,086 1,117,305 1,361,909
Interest Expense 108,732 115,532 431,868 443,688
Fund Expenses 69 6,296 118,987 19,676
Total Expenses 941,570$ 1,500,117$ 4,981,130$ 6,819,326$
Other Income (Loss) (188,370)$ (21,171)$ (83,997)$ 48,838$
Income Before Provision for Taxes 155,080$ 1,561,277$ 2,957,714$ 6,459,480$
Provision for Taxes 45,957 232,451 513,461 1,021,671
Net Income 109,123$ 1,328,826$ 2,444,253$ 5,437,809$
Redeemable NCI in Consolidated Entities (163,929) 306 (245,518) (61,289)
Non-Redeemable NCI in Consolidated Entities 121,252 624,647 1,298,891 2,722,590
Net Income Attributable to Blackstone Inc. (''BX'') 151,800$ 703,873$ 1,390,880$ 2,776,508$
Net Income Per Share of Common Stock, Basic 0.20$ 0.92$ 1.84$ 3.62$
Net Income Per Share of Common Stock, Diluted 0.20$ 0.92$ 1.84$ 3.62