Blackstone Group LP (NYSE: BX) for the first quarter of FY18 has posted economic net income per share of 65 cents, down from 81 cents a year earlier. However, it has beaten the analysts’ expectation, who on average had expected 45 cents, as per Thomson Reuters. The profits have soared at private-equity firms such as BX in recent years, as a U.S. stock market rally allowed them to sell assets for top dollar. However, that rally came to an end in the first quarter, amid a trade dispute between the world’s two largest economies, the United States and China. The stock surged over 2.2% on April 19th, 2018 (as of 12:05 PM GMT-4; Source: Google finance). Overall, the private-equity firm’s net income fell to $367.9 million, from $451.9 million, a year earlier.
Moreover, BX has planned to double assets under management over the next five years. Part of its expansion will depend on a push into the market for retail investors. The company is targeting people with $1 million to $5 million. However offering private equity to individuals is not easy because the investments are hard to liquidate quickly and come with higher fees than traditional mutual funds. The total assets under management in the first quarter 2018 have risen 22 percent from a year earlier to a record $449.6 billion through a combination of fundraising and financial gains. Inflows were $18.2 billion in the first quarter 2018.
BX has planned to pay a 30 cent special dividend in 2018, returning to shareholders a portion of the proceeds from the conclusion of its partnership with FS Investment. The company has increased its share buyback authorization to $1 billion from $335.8 million.
Meanwhile, In January, Blackstone had agreed to buy a majority stake in the financial and risk business of Thomson Reuters, which is the parent company of Reuters News, in a $20 billion deal. Reuters News will remain part of Thomson Reuters.
On the other hand, BX has made several leadership changes in the past year. The company has recently promoted real estate head Jon Gray to president and chief operating officer, making him an heir apparent. Ken Caplan and Kathleen McCarthy replaced him. In January, John McCormick was named to take over the hedge fund business as Tom Hill stepped into a chairman role. And in June, the former head of the firm’s energy debt practice, Dwight Scott, became president of the credit unit, GSO Capital Partners.