How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Blackstone Inc. (BX) ten years ago? It may not have been easy to hold on to BX for all that time, but if you did, how much would your investment be worth today?
Blackstone Inc.'s Business In-Depth
With that in mind, let's take a look at Blackstone Inc.'s main business drivers.
Headquartered in New York, Blackstone Inc. is an asset manager of alternative investments and a provider of financial advisory services globally. As of Jun 30, 2023, total AUM was $1 trillion and fee-earning AUM was $731.2 billion. Notably, effective Sep 18, 2023, the company will join the S&P 500 index.
The company operates its businesses through four segments:
The Private Equity segment comprises management of private equity funds, collectively called the Blackstone Capital Partners (BCP) funds, along with energy and communications-related investments. Also, the segment includes Tactical Opportunities business, Strategic Partners Fund Solutions and Blackstone Total Alternatives Solution. As of Jun 30, 2023, segmental AUM was $295.3 billion.
The Real Estate segment primarily comprises management of real estate funds called the Blackstone Real Estate Partners (BREP) funds. In addition, the segment has two other funds – Blackstone Real Estate Debt Strategies (BREDS) funds and Blackstone Property Partners (BPP) funds. As of Jun 30, 2023, segmental AUM was $333.2 billion.
The Hedge Fund Solutions segment consists of Blackstone Alternative Asset Management (BAAM), an institutional solutions provider utilizing hedge funds across a variety of strategies. The segment’s AUM was $78.2 billion as of Jun 30, 2023.
The Credit & Insurance segment includes senior credit-focused funds, distressed debt funds, mezzanine funds and general credit-focused funds concentrated in the leveraged finance marketplace. All these are managed by Blackstone’s subsidiary. As of Jun 30, 2023, segmental AUM was $294.6 billion.
In 2017, Blackstone acquired Aon's Technology-enabled HR Business and Harvest Fund Advisors LLC. In 2018, Blackstone, along with Canada Pension Plan Investment Board and GIC, acquired a majority stake in Thomson Reuters’ Financial & Risk business, and Clarus. In 2020, the company acquired DCI.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Blackstone Inc. if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in September 2013 would be worth $4,420.84, or a gain of 342.08%, as of September 26, 2023, and this return excludes dividends but includes price increases.
The S&P 500 rose 156.23% and the price of gold increased 39.06% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for BX.
Shares of Blackstone have outperformed the industry over the past six months. Strong revenue mix, global footprint and solid assets under management (AUM) balance are expected to keep supporting the company’s financials. Its robust fund-raising ability will support profitability. Our estimates for total AUM indicate a CAGR of 2.6% by 2025. While we project segment revenues to decline 18.1% in 2023, the metric will rebound and jump 39.4% in 2024 and 16.1% in 2025. However, elevated operating expenses are likely to hurt the company's bottom-line growth. Our estimates for total expenses suggest a CAGR of 16.8% over the next three years. Lower chances of sustainability of its capital distribution activities are a headwind. The company has been facing substantial outflows in some of its funds of late, which are likely to hurt its financials.
The stock has jumped 9.34% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2023; the consensus estimate has moved up as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report