NEW YORK CITY—In an attempt to attract further domestic and international investment, Blackstone reports that it intends to convert from a publicly-traded partnership to a corporation structure in the coming months.
The New York City-based global investment firm says it will begin operating as a corporation effective July 1. The firm also reported its first quarter financial results that indicated Blackstone’s assets under management now exceeds $512 billion, up 14% year over year.
“I am pleased to announce the compelling next step in Blackstone’s evolution as a public company: the firm’s conversion to a corporation,” says Stephen A. Schwarzman, chairman, CEO and co-founder of Blackstone. “Blackstone has established itself as one of the leading public companies in the world, with robust long-term revenue and earnings growth and one of the most powerful brands in financial services.”
He adds, “We believe the decision to convert will make it significantly easier for both domestic and international investors to own our stock and should drive greater value for all of our shareholders over time.”
Among the advantages Blackstone cites is that despite its market-leading position as a global investment firm, Blackstone’s partnership structure has limited the market for its shares. The conversion the company notes will unlock opportunity for equity value appreciation by removing ownership restrictions and meaningfully expand global investor interest. The conversion will also provide significant potential benefit at relatively modest additional tax cost.
Schwarzman says that Blackstone captured $43 billion of capital inflows in the first quarter and a record $126 billion over the last 12 months.
Blackstone’s net income was $1.1 billion for the first quarter and $3.5 billion over the last 12 months. Net income attributable to the Blackstone Group L.P. was $481 million for the quarter and $1.7 billion over the last 12 months.
Blackstone’s real estate segment reported $5.03 billion in inflows in the first quarter and approximately $32.9 billion in the last 12 months.
A deeper dive into Blackstone’s real estate segment’s financial results shows that total assets under management increased 17% to a record $140.3 billion with inflows of $5.0 billion in the quarter and $32.9 billion for the last 12 months.
During the first quarter, the firm launched fundraising for its sixth European opportunistic fund and fourth real estate debt fund.
The firm posted $3.1 billion in realizations in the first quarter and $15.1 billion for the last 12 months. Realizations in the first quarter included the first Invitation Homes secondary offering and asset sales in U.K. office and U.S. multifamily portfolios.
Blackstone also closed the first Embassy REIT IPO, the first-ever Indian REIT listing that began trading on the Indian stock exchanges under the ticker “EMBASSY” on April 1.
The firm deployed $3.1 billion in the first quarter and $17.5 billion for the last 12 months, including the Network Rail real estate portfolio and a southern California industrial portfolio in the quarter.