Thu Oct 17 12:10:00 UTC 2024: ## Blackstone’s Credit Arm Drives Profit Growth, Outpacing Real Estate
**New York, NY -** Blackstone Inc., the world’s largest alternative asset manager, saw its third-quarter profits rise by 5.5% to $1.28 billion, driven by strong performance in its credit division. This makes credit the company’s biggest business by assets, overtaking its traditional stronghold in real estate.
The credit and insurance arm attracted $21.4 billion in investor cash during the quarter, accounting for over half of Blackstone’s total inflows. Credit assets now represent $354.7 billion of Blackstone’s total $1.1 trillion in assets, surpassing real estate for the first time.
Blackstone’s credit business has benefited from a surge in investor interest in fixed income investments, particularly in the current volatile economic environment. This trend is reflected in the broader alternative investment industry, as managers move beyond traditional private equity and real estate to offer a wider range of financial products.
While Blackstone’s credit arm flourished, private equity and real estate saw muted performance during the quarter. Private equity earnings declined by 11%, while real estate earnings dropped by 3%, hampered by a sluggish property market and high debt costs.
Despite the challenges in some sectors, Blackstone’s overall earnings exceeded analysts’ expectations, with distributable earnings reaching $1.01 per share.
Blackstone President Jon Gray expressed optimism about the future, highlighting the company’s diversified business model and the growing confidence in the deal market. He believes the company is moving towards positive net flows in its marquee Blackstone Real Estate Income Trust (BREIT) and that overall, the deal environment is “at an inflection point.”
Blackstone’s shares rose by 1.9% in early trading, reflecting investor confidence in the company’s strong credit performance. The stock has gained 22% this year, trailing competitors such as Apollo Global Management, KKR & Co., and Ares Management Corp.
Blackstone’s robust performance in credit underscores the increasing importance of this asset class for alternative investment managers as they seek to diversify and capitalize on shifting market dynamics.
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