Investment Thesis
Blackstone (BX) represents a compelling long-term investment opportunity. The market is underestimating the fee-related earnings (FRE) potential of the business and the advantages scale brings to operating leverage. Further, Blackstone is positioned well in a market softening with its recent investments and its disciplined, tenured team.
Company Background
Blackstone is an alternative asset manager with roots in private equity. The firm makes money from management fees on assets under management ((AUM)), ~1% of committed capital. It also makes a percentage of the profits from investments (carry) when it realizes investments (~20%).