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Blackstone profit rises 26% as AI-driven deals offset weaker fees
A key fee metric fell short of expectations, and private credit profit declined for a second quarter as retail inflows dropped to $1.0 billion.
Blackstone Inc. reported a strong quarter, with profit available to shareholders increasing 26% to $1.52 a share, topping estimates around $1.33 to $1.35, according to Yahoo Finance. Revenue rose 36% to $5.04 billion, and assets under management climbed 11% to $1.35 trillion.
The firm’s results were buoyed by AI-related investments, with nine of its ten best-performing investments tied to artificial intelligence. Blackstone also pointed to deal activity, including new transactions tied to Google AI chips and other AI infrastructure, plus asset sales including a data center portfolio for $8 billion and a battery storage company for $7 billion.
Still, not all segments strengthened. Base management fees came in lighter than expected, and the private credit business posted its second straight quarter of falling profit, down 6% to $373 million.
Retail fundraising in private credit also weakened, with the flagship retail fund pulling in $1.0 billion from wealthy individual investors this quarter, down from $1.9 billion last quarter and $3.7 billion a year ago. Blackstone president Jon Gray said withdrawal requests have slowed materially in the current quarter, but the pullback was described as real by the outlet.
The article also highlighted infrastructure financing, which generated a record $321 million in transaction fees this quarter, nearly double last year. It further quoted Gray arguing the firm should trade at a higher valuation due to low debt and a dividend yield near 4%.