Blackstone: “We don’t need financing to get things done”

Despite $2.6B net income loss in Q1, firm said it’s poised to deploy $152B in dry powder

TRD NATIONAL /
Apr.April 23, 2020 01:00 PM
Blackstone's president Jonathan Gray and CEO Stephen Schwarzman (Credit: Gray via Drew Angerer/Getty Images; Schwarzman via Himanshu Bhatt/NurPhoto via Getty Images)

Blackstone’s president Jonathan Gray and CEO Stephen Schwarzman (Credit: Gray via Drew Angerer/Getty Images; Schwarzman via Himanshu Bhatt/NurPhoto via Getty Images)

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.


Related Articles

arrow_forward_ios
Map of priciest condo sales and Icon South Beach (Credit: Google Maps and Gzzz via Wikipedia)

Miami condo sales volume nosedives in mid-May

Miami condo sales volume nosedives in mid-May
110 Atlantic Avenue, Scott Schuster (Credit: Google Maps)

Healthcare entrepreneur sells Palm Beach home for $8M

Healthcare entrepreneur sells Palm Beach home for $8M
Miami Beach Votes To Reopen Pools (Credit: iStock)

Miami Beach votes to reopen pools in resi buildings, but needs the county to sign off

Miami Beach votes to reopen pools in resi buildings, but needs the county to sign off
(Credit: iStock)

Home sales dropped big time in South Florida in April

Home sales dropped big time in South Florida in April
Miami Beach Mayor Dan Gelber and City Manager Jimmy Morales (Credit: Nicholas Hunt/Getty Images, and Mike Coppola/Getty Images)

Miami-Dade targets June 1 opening date for hotels, beaches following Miami Beach vote

Miami-Dade targets June 1 opening date for hotels, beaches following Miami Beach vote
(Credit: iStock)

Luxury condo prices drop in downtown Miami amid lockdown

Luxury condo prices drop in downtown Miami amid lockdown
Anabella Smith, Louis Archambault, Scott Goldstein

“There’s a lot of concern about going back to an office”: how companies are returning to work in South Florida

“There’s a lot of concern about going back to an office”: how companies are returning to work in South Florida
Florida Keys

Florida Keys to reopen to visitors June 1

Florida Keys to reopen to visitors June 1
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...