Blackstone plans to list some of its largest investments

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Blackstone plans to list some of its largest investments, the world’s biggest private capital group said on Thursday, after sluggish asset sales hit its third-quarter profits.

Jonathan Gray, Blackstone’s president, said the recent technology-fuelled rally in global stock markets signalled a likely return of investor interest in initial public offerings. He argued that this paved the way for share sales by the group, whose global assets now total $1.1tn.

“We are preparing to take some portfolio companies public . . . I would say the discussions have gone from theoretical to practical and we are talking about things like timing,” Gray said in an interview with the Financial Times.

“When you have this strong of an equity market it’s almost like a magnet pulling companies out of the private market,” he added, cautioning that his optimism about IPOs depended on stock markets remaining stable.

Global stock markets have risen 18 per cent this year, according to the MSCI World index.

However, so far, the downturn in IPO activity due to interest rate rises in 2022-23 has hit Blackstone’s overall profits.

For the first nine months of 2024, the group earned just $1.4bn in realised performance fees, one of its most closely watched metrics. The figure was up 4 per cent on the same period last year, but far less than the $7.7bn it earned in the same timeframe in 2022.

“Realisations are the one engine that has been muted, but is definitely looking better,” said Gray.

The $77.6bn raised by IPOs globally in the first nine months of 2024 represents a 23 per cent decline on the same period last year, according to EY, and is less than a quarter of the record volumes reached in 2021.

But, with interest rates now coming down, private equity groups including Carlyle, EQT and BC Partners have recently decided to take large companies public, with shares in many of the companies floated subsequently rising.

While Blackstone’s decision to wait to sell investments has crimped its profits, it has picked up its dealmaking pace, investing $34bn in the most recent quarter, the highest such figure in more than two years.

It was also able to attract $41bn in new investor capital, pushing its fee-earnings assets to a new record.

Blackstone generated $1.2bn in fee-based earnings, slightly beating analysts’ forecasts polled by Bloomberg.

Growth at the group was fuelled by its credit and insurance businesses, which received $21bn in new investor commitments.

The results were also boosted by Blackstone’s decade-long push to raise money from wealthy individual investors, who now account for roughly a quarter of its overall assets.

Gray added that redemptions from Blackstone’s closely watched property fund, Breit, had slowed dramatically and that it was on the verge of returning to growth.

“If current trends continue, we are clearly moving towards positive net flows for Breit,” he said.

Investors have pulled more than $15bn in cash from Breit since December 2022.