Blackstone Group Inc, the world's largest manager of alternative assets such as private equity and real estate, said on Thursday its distributable earnings in the second quarter rose 1% year-on-year, more than most analysts expected.
Higher earnings from the sale of assets in Blackstone's private equity, credit and fund-of-hedge-funds divisions was almost offset by a plunge in proceeds from divestments in its real estate unit.
However, Blackstone's distributable earnings of 57 cents per share was higher than the 49 cents that analysts forecast on average, according to data compiled by Refinitiv.
The New York-based firm reported net income per share on a diluted basis of 45 cents, based on generally accepted accounting principles (GAAP), down 59% from a year ago.
Investors chose to focus on the better-than-expected distributable earnings, which show the cash available for paying dividends. Blackstone shares jumped 2.5% to 46.39 in premarket trading in New York.
"We view this earnings release as very positive. Blackstone reported (sales of assets) of $10.6 billion, which was above our estimate of $8.9 billion and higher quarter-over-quarter," Credit Suisse analysts wrote in a research note.
Blackstone said its assets under management rose to a record $545.5 billion in the three months through June, from $511.8 billion in the prior quarter. A key driver of fundraising was the $8 billion initial amount raised for Blackstone's sixth real estate European opportunistic fund, and another $7 billion raised for infrastructure investments.
The firm said it would pay a second-quarter distribution of 48 cents per share.
Blackstone said the value of its private equity portfolio appreciated by 0.7%, compared to a 3.8% rise in the benchmark S&P 500 stock index. Opportunistic funds and core real estate funds appreciated 4.4% and 0.8% in the quarter, respectively.
Stock market swings impact private equity firms because they often have large public market holdings in investments that they are in the process of exiting. Public markets are also used as a measuring stick when valuing private investments.
"These results reflect the enormous confidence our firm has earned with global investors through decades of delivering strong performance and innovation," Chairman and Chief Executive Steve Schwarzman said in a statement.
This was Blackstone's first earnings report since officially converting from a partnership to a corporation on July 1, a move designed to boost its share price.
Since making the announcement in April, Blackstone's stock has jumped by around 25%, outperforming the broader market.