10-QPeriod: Q3 FY2013

Blackstone Inc. Quarterly Report for Q3 Ended Sep 30, 2013

Filed November 8, 2013For Securities:BX

Summary

Blackstone Inc. (BX) reported its third-quarter 2013 financial results, showcasing robust growth and strong performance across its various business segments. Total revenues remained stable year-over-year for the quarter at $1.22 billion, though performance fees saw a notable decline due to lower unrealized gains in certain segments, offset by strong realized performance fees. Investment income also saw a slight decrease due to prior-year outperformance. However, management and advisory fees saw a significant increase, driven by growth in Fee-Earning Assets Under Management across its Private Equity, Real Estate, Hedge Fund Solutions, and Credit segments. The company's expense base saw a decrease in compensation and benefits, largely due to lower equity-based compensation charges. This led to a substantial increase in Net Income Attributable to The Blackstone Group L.P. to $171.16 million, a 33% increase year-over-year. The company's Assets Under Management grew to $248.1 billion, reflecting successful fundraising and market appreciation. Liquidity remains strong with $888.9 million in cash and cash equivalents.

Financial Highlights

33 data points
Beta

Revenue

$1.22B

Net Income

$171.16M

14.1% Net Margin

EPS (Diluted)

$0.29

Total Assets

$28.03B

Cash & Equivalents

$888.94M

Free Cash Flow

$1.39B

Financial Statements
Beta
Revenue$1.22B
Operating Expenses$786.40M
Interest Expense$26.27M
Net Income$171.16M
EPS (Basic)$0.29
EPS (Diluted)$0.29
Shares Outstanding (Basic)589.64M
Shares Outstanding (Diluted)592.92M

Key Highlights

  • 1Total Revenues for Q3 2013 were $1.22 billion, remaining stable compared to the prior year quarter.
  • 2Net Income Attributable to The Blackstone Group L.P. increased significantly by 33% to $171.16 million, driven by improved operational efficiencies and strong underlying fund performance.
  • 3Management and Advisory Fees, Net increased by 13% to $531.1 million, reflecting growth in Fee-Earning Assets Under Management across multiple segments.
  • 4Performance Fees decreased by 10% to $541.3 million, primarily due to lower unrealized gains, though realized performance fees saw substantial growth.
  • 5Total Expenses decreased by 8% to $786.4 million, largely due to a reduction in compensation and benefits, including lower equity-based compensation charges.
  • 6Assets Under Management grew by 8% to $248.1 billion, demonstrating continued investor confidence and successful capital deployment.
  • 7Cash and cash equivalents stood at $888.9 million, indicating a healthy liquidity position.

Frequently Asked Questions

Performance Fees decreased by 10% to $541.3 million in Q3 2013 compared to the prior year. This was primarily due to lower unrealized gains in the Private Equity and Credit segments, which were partially offset by strong realized performance fees and significant appreciation in the Real Estate segment.

Management and Advisory Fees, Net increased by 13% to $531.1 million. This growth was driven by an increase in Fee-Earning Assets Under Management across the Private Equity, Real Estate, Hedge Fund Solutions, and Credit segments, reflecting successful fundraising and positive market performance.

Blackstone maintained a strong liquidity position with $888.9 million in cash and cash equivalents as of September 30, 2013. Additionally, the company had $1.1 billion invested in its Treasury Cash Management Strategies, providing further readily available capital.

The acquisition of Strategic Partners Fund Solutions on August 5, 2013, contributed to the increase in Fee-Earning Assets Under Management and total Assets Under Management, particularly within the Private Equity segment, and is expected to drive future fee revenue.