10-QPeriod: Q1 FY2013

Blackstone Inc. Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 8, 2013For Securities:BX

Summary

Blackstone Inc. (BX) reported a strong first quarter of 2013, with total revenues increasing by 31% year-over-year to $1.25 billion. This growth was primarily driven by a significant surge in Performance Fees, up 56% to $601 million, and a 67% increase in Investment Income to $149 million. The robust performance in Performance Fees was fueled by realizations across its Private Equity and Real Estate segments, reflecting favorable market conditions and strong fund performance. Despite an overall increase in expenses due to higher performance fee compensation, Net Income Attributable to The Blackstone Group L.P. surged by 187% to $167.6 million. Fee Related Earnings (FRE) saw a slight decrease to $137.7 million from $146.9 million in the prior year, indicating continued operational costs while performance-driven income grew substantially. The company maintained a healthy liquidity position with $815.3 million in cash and cash equivalents at the end of the quarter.

Financial Highlights

32 data points
Beta

Revenue

$1.25B

Net Income

$167.63M

13.4% Net Margin

EPS (Diluted)

$0.29

Total Assets

$27.98B

Cash & Equivalents

$815.27M

Free Cash Flow

$1.10B

Financial Statements
Beta
Revenue$1.25B
Operating Expenses$835.10M
Interest Expense$27.06M
Net Income$167.63M
EPS (Basic)$0.29
EPS (Diluted)$0.29
Shares Outstanding (Basic)582.32M
Shares Outstanding (Diluted)585.70M

Key Highlights

  • 1Total Revenues surged 31% year-over-year to $1.25 billion, driven by strong Performance Fees and Investment Income.
  • 2Performance Fees increased by 56% to $601 million, reflecting successful realizations and strong fund performance across segments.
  • 3Investment Income more than doubled, increasing 67% to $148.6 million, primarily from Private Equity and Real Estate segments.
  • 4Net Income Attributable to The Blackstone Group L.P. grew significantly by 187% to $167.6 million.
  • 5Fee Related Earnings (FRE) decreased slightly to $137.7 million, while Distributable Earnings increased substantially to $378.8 million.
  • 6Assets Under Management (AUM) grew to $218.2 billion, up 4% from the prior quarter, with strong inflows across all segments.
  • 7The company maintained a strong balance sheet with $815.3 million in cash and cash equivalents and $1.3 billion in Treasury cash management strategies.

Frequently Asked Questions

Blackstone's revenue growth in Q1 2013 was primarily driven by a significant increase in Performance Fees, which rose by 56% year-over-year to $601 million. This was complemented by a strong 67% increase in Investment Income, reflecting successful realizations and favorable market conditions across its investment funds.

All segments demonstrated revenue growth, with Real Estate showing a 33% increase to $568.5 million, driven by strong Performance Fees. Private Equity revenues grew 32% to $225.4 million, boosted by Investment Income and Performance Fees. Hedge Fund Solutions revenues increased by 43% to $167.7 million, largely due to higher Performance Fees. The Credit segment saw revenues rise 27% to $229.5 million, also propelled by Performance Fees. The Financial Advisory segment experienced a 12% decline in revenues to $68.5 million, primarily due to fewer transactions compared to the prior year.

Fee Related Earnings (FRE) saw a slight decrease to $137.7 million from $146.9 million in the prior year. This indicates that while operational revenues are stable, the costs associated with managing these operations have increased. However, Distributable Earnings, which reflects realized earnings available for distribution, saw a substantial increase to $378.8 million from $162.1 million, demonstrating the strong realized performance of the business beyond just fee-generating activities.

Blackstone's total Assets Under Management (AUM) increased by 4% from the previous quarter to $218.2 billion. This growth was driven by inflows across all segments, particularly in Credit and Real Estate, and positive market appreciation, reflecting continued investor confidence and successful fundraising efforts.