Blackstone wants investors to know that it is ready to pounce on investment opportunities.
In a first quarter earnings call Thursday, the company reported a net income loss of $2.6 billion — or $1.58 per share — but highlighted the ample dry powder it’s ready to deploy.
Distributable earnings were $557 million, up 4 percent from last year. And while opportunistic and core plus real estate funds declined 8.8 percent and 3.9 percent respectively, assets under management rose 5 percent to $538 billion.
Blackstone’s president, Jonathan Gray, struck a confident tone, noting that in a crisis such as the coronavirus pandemic a firm requires “staying power to ride out the storm, and firepower to take advantage of opportunities.” Blackstone has both, he contended in the call to investors, pointing to its whopping $152 billion in dry powder and the company’s 35-year track record of using downturns to its advantage.
The earnings call was held remotely — but money from investors is still pouring in, according to the investment giant’s chairman and CEO Stephen Schwarzman, who said he received news of an individual commitment of $500 million a few days ago via email.
Blackstone raised $27 billion in capital in the first quarter, including $12 billion in the last two weeks of March, after the pandemic had set in, according to the company.
But it may take time for Blackstone to start deploying all that capital. For now, the firm is focusing on buying debt and stocks. Eventually, after forbearance periods conclude and loans held by other companies go into special servicing, Blackstone predicts it will be well-positioned to provide rescue capital to assets in distress.
“The first year after the shock is pretty slow, then things start to pick up,” Gray said. “We have so much capital — that’s a great competitive advantage. We don’t need financing to get things done.”
Overall, Blackstone’s investments in logistics are looking better than ever, as demand for delivery services ramps up.
Hotels and retail, the sectors most severely impacted by Covid-19, occupy only 15 percent of the company’s global real estate portfolio, while logistics, office and residential make up the rest.