10-QPeriod: Q1 FY2011

Blackstone Inc. Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 6, 2011For Securities:BX

Summary

Blackstone Inc. (BX) reported strong revenue growth in the first quarter of 2011, with total revenues increasing by 64% year-over-year to $1.15 billion. This surge was primarily driven by a significant increase in Performance Fees, up 228%, reflecting improved operating performance across its real estate, credit, and private equity segments. Management and Advisory Fees also saw a healthy increase of 16%. Despite a slight increase in operating expenses, largely due to higher general, administrative, and other costs, Blackstone achieved a substantial turnaround from the prior year's net loss, reporting a net income of $78.4 million for the quarter. This performance was bolstered by strong fee-earning assets under management growth across all segments, particularly in Private Equity and Hedge Fund Solutions, signaling robust client demand and effective asset growth strategies.

Financial Statements
Beta
Revenue$1.15B
Operating Expenses$990.86M
Interest Expense$13.80M
Net Income$42.70M
EPS (Basic)$0.10
EPS (Diluted)$0.09
Shares Outstanding (Basic)447.74M
Shares Outstanding (Diluted)457.65M

Key Highlights

  • 1Total Revenues surged by 64% to $1.15 billion, driven by a 228% increase in Performance Fees and a 16% rise in Management and Advisory Fees.
  • 2Blackstone returned to profitability with a Net Income of $78.4 million, a significant improvement from a net loss in the prior year period.
  • 3Fee-Earning Assets Under Management grew by 13% to $124.0 billion, indicating strong client inflows and positive market appreciation.
  • 4Assets Under Management increased by 17% to $150.0 billion, demonstrating continued expansion in managed capital.
  • 5The Private Equity segment saw a 50% increase in Assets Under Management, largely due to the commencement of the BCP VI investment period.
  • 6The Real Estate segment experienced a 60% increase in Assets Under Management, driven by market appreciation and new platform management.
  • 7Despite an increase in operating expenses, the company effectively managed its cost structure, leading to a 10% decrease in total expenses year-over-year.

Frequently Asked Questions

Blackstone's revenues increased substantially by 64% to $1.15 billion, primarily driven by a significant surge in Performance Fees, which rose by 228%. This strong performance in performance fees was attributed to improved operating results across the company's Real Estate, Credit Businesses, and Private Equity segments. Management and Advisory Fees also contributed positively with a 16% increase, reflecting growth in assets under management and new business initiatives.

Blackstone achieved a net income of $78.4 million for the first quarter of 2011, a dramatic turnaround from the net loss of $(237.3) million reported in the first quarter of 2010. This improvement was driven by the strong revenue growth, particularly from performance fees, and a reduction in overall expenses, notably in compensation and benefits.

Blackstone's Fee-Earning Assets Under Management (FEAUM) grew by 13% to $124.0 billion as of March 31, 2011, indicating successful capital raising and client asset growth. Total Assets Under Management (AUM) also saw a substantial increase of 17% to $150.0 billion, reflecting continued expansion of the firm's overall managed capital base across all its business segments.