It is that time of the year again when private equity firms are set to announce their profits. The result season started with a bang, as Blackstone Group announced on Thursday it has more than doubled its first quarter profit from a year ago.
Even though the firm is considered to be one of the top firms, its profit margins still surprised analysts. The firm announced it would be paying out one of the largest quarterly dividend in Blackstone’s history due to the result.
The US-based private equity firm announced its first quarter profit in 2015 stood at $629 million, which is $1.01 per share. This is up from the $266 million it made during the same period in 2014. Net income stood at $1.6 billion, which again was well above its last year’s figure. In 2014, the economic net income reached $814 million.
The net income means it made $1.37 a share, with Marketwatch reporting it beat the analysts’ expectations of creating economic net income of $1.04 a share. The impressive gains have led the firm to announce its highest ever quarterly dividend of 89 cents per share.
Real Estate Remains Strong
Blackstone has managed to stay away from much of the trouble caused by slumped oil prices. Much of it is due to its strong real estate assets. The unit is already the biggest in the world, but it continues to grow.
Its recent real estate focused fund has managed to raise nearly $15 billion in four months, according to Bloomberg. Blackstone CEO, Steve Schwarzman, told Bloomberg Television, the firm’s expansion rate isn’t a worry because, “there are moats around a business like ours”.
Increase in Assets
Furthermore, many analysts were quick to point out the private equity firm has managed the impressive figures while also increasing assets. Its total assets under management have increased by 14% since 2014.
They currently stand at $310 billion. The growth is staggering when you compare its assets to its closest rival. Carlyle Group had $194.5 billion worth of assets under management at the end of last year.
The private equity unit reported a 160% increase in earnings. This is largely due to performance fee rises. Some of its most notable IPOs in recent years include the Catalent Inc. deal, as well as IPO for Merlin Entertainments, the UK-based theme park operator.
Stock Price Surge
The firm’s announcement was able to push up its share price by 3.6% during pre-market trading on Thursday. The stock has been one of the best performers among private equity firms during the first few months. It had gone up by 21% through April 15, while most other private equity firms have had to deal with declining share price.
KKR’s stock was down by 1.2%, while Apollo Global Management has lost 7% in the first months. Carlyle, on the other hand, has been able to increase its price. It will be interesting to see whether further surprises are on the way during the result season.