Blackstone beats earnings estimate as its assets reach record levels and dealmaking increases

Blackstone (BX) beat Wall Street's expectations for its key quarterly earnings measure on Thursday, as assets under management (AUM) at the world's largest alternative investment firm hit a record $1.1 trillion and the value of its funds rose.

New York-based Blackstone said it recorded $41 billion in inflows in the third quarter while deploying and committing capital of $54 billion – its highest in over two years. Amid a revival in business activity as the Federal Reserve cut interest rates and economic conditions improved The outlook remained confident.

In recent quarters, high interest rates have weighed on some aspects of Blackstone's business. With the Fed now entering an easing cycle, the company saw stress begin to increase.

The company's private equity funds increased 6.2% in the quarter and its infrastructure funds increased 5.5%, contributing to Blackstone's highest fund value gain in three years.

Chief Executive Steve Schwarzman hailed the results as “a broad acceleration across our business.”

Blackstone's distributable earnings, which are cash that can be used to pay dividends, totaled $1.3 billion in the third quarter, up 6% from a year ago. This resulted in distributable earnings per share of $1.01, beating analysts' average estimate of $0.92, according to LSEG data.

Fundraising during the quarter was primarily through loans. It said private assets under management have reached $250 billion, with fundraising from individuals nearly doubling year-to-date compared to last year.

Blackstone's key transactions this quarter included its $16 billion acquisition of Australia's AirTrunk, strengthening the fund's position in the data center market supporting cloud services and AI. The company also agreed to acquire US software company Smartsheet for $8.4 billion including debt, together with Vista Equity Partners.

The company's market cap is currently $195 billion, with shares hitting an all-time high of $159.71 on October 16.

(Reporting by Echo Wang in New York; Editing by Paritosh Bansal and Muralikumar Anantharaman)