Blackstone profit surges on private equity, credit strength

By Arasu Kannagi Basil and Isla Binnie (Reuters) -Blackstone, the world's largest alternative asset manager, beat analysts' estimates for third-quarter profit on Thursday, driven by a rebound in private equity and growth in its credit business. Distributable earnings, or cash that can be used to pay dividends to shareholders, jumped 48% to $1.89 billion, or $1.52 per share, in the quarter. Analysts had expected $1.23 per share, according to estimates compiled by LSEG. Shares of the New York-based company rose more than 2% before the bell. Transactions have come thick and fast in recent months after volatility earlier in the year following U.S. President Donald Trump's announcement of tariffs on imports, as corporate boardrooms adapt to persistent uncertainty. Blackstone sold a total $30 billion of investments in the quarter, including $9.3 billion in private equity assets, more than doubling earnings from that part of the business from the previous three months. The traditional private equity model of buying and selling businesses has snarled up recently as firms try to offload assets acquired during periods of much lower interest rates. Among large deals, Blackstone's credit and insurance business led a $7 billion investment in a liquefied natural gas facility owned by Sempra in Texas. It also took energy and maintenance services provider Legence public. In all, Blackstone deployed $26.6 billion of capital in the quarter and has $188.1 billion in dry powder. Keeping up momentum into the fourth quarter, Blackstone teamed up with private equity peer TPG to take medical diagnostics firm Hologic private in a deal valued at up to $18.3 billion. Chairman and Chief Executive Officer Stephen Schwarzman highlighted investments in digital and energy infrastructure as areas of growth. Within private equity, its infrastructure strategy performed best. STRONG FUNDRAISING Blackstone's credit and insurance arm accounted for nearly two-thirds of the $54.2 billion in inflows in the quarter, lifting assets under management to a record $1.24 trillion. The unit, the company's biggest business by assets, is a key driver of the firm's growing influence in private credit. Management's commentary on credit markets will be closely watched, with analysts expecting the industry to temper concerns on asset quality. Alternative asset managers' stocks have weakened in recent weeks as the bankruptcies of auto parts retailer First Brands and subprime lender Tricolor stoked investor concerns on credit risks. Blackstone shares had fallen 6% this year as of Wednesday's close, underperforming the benchmark S&P 500 index. (Reporting by Isla Binnie in New York and Arasu Kannagi Basil in Bengaluru; Editing by Sriraj Kalluvila, Kirsten Donovan)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)