2024-04-05 12:40:40 ET
Summary
- Blackstone has experienced a revenue decline over the last few years due to lower valuations in the alternative space, which have prevented managers from realizing investments and gaining performance fees.
- The AUM has continued to rise despite the challenging times for alternatives. Although trailing multiples indicate that the company is overvalued, it is considered fairly valued on a forward basis.
- With the macroeconomic conditions improving due to rate cuts, Blackstone has the opportunity to realize private investments at higher valuations, thereby gaining higher performance fees. This justifies a buy rating.
Blackstone (NYSE: BX ) is the biggest alternative investments asset manager in the world. It has a market cap of around $150 billion, annual revenues of $7.7 billion, earnings of $1.3 billion, and total assets of $40 billion as of December 2023. The company offers fund solutions within a wide range of alternative investments. This includes real estate, private capital, and hedge funds solutions. The type of clients they serve encompass within institutional investors with long investment horizons such as endowments, foundations, pension funds, and sovereign wealth funds. Particularly, a savings or future-generation sovereign wealth fund like the fund of the Abu Dhabi Investment Authority, for example....
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Blackstone: Buy Rating, Despite Trading At 69 Times Trailing P/E Ratio