The Blackstone Group’s (BX) CEO Steve Schwarzman on Q3 2014 Results – Earnings Call Transcript

The Blackstone Group L.P. (NYSE:BX)

Q3 2014 Earnings Conference Call

October 16, 2014 11:00 am ET


Joan Solotar – Senior Managing Director, External Relations & Strategy

Steve Schwarzman – Chairman, CEO, Founder

Laurence Tosi – CFO

Tony James – President, COO


Craig Siegenthaler – Credit Suisse

Bill Katz – Citi

Michael Kim – Sandler O’Neill

Glenn Schorr – ISI

Patrick Davitt – Autonomous

Robert Lee – KBW

Devin Ryan – JMP Securities

Mike Carrier – Bank of America

Marc Irizarry – Goldman Sachs

Brian Bedell – Deutsche Bank

Bulent Ozcan – Royal Bank of Canada


Good day ladies and gentlemen and welcome to the Blackstone Third Quarter 2014 Investor Call. My name is Lisa and I will be your operator for today. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today Ms. Joan Solotar, Senior Managing Director, Head of External Relations and Strategy. Please proceed ma’am.

Joan Solotar – Senior Managing Director, External Relations & Strategy

Thanks Lisa. Good morning, everyone. Welcome to Blackstone’s third quarter 2014 conference call. So I’m joined today by Steve Schwarzman, Chairman and CEO; Tony James; President and Chief Operating Officer; Laurence Tosi, CFO and Weston Tucker, Head of IR. Earlier this morning we issued our press release and slide presentation illustrating our results which are available on the Web site. We expect to file the 10-Q in the next few weeks.

So I’d like to remind you that the call may include forward-looking statements, which are uncertain and outside of the firm’s control. And actual results may differ materially. After a discussion of some of the risks, please see the Risk Factor section of our 10-K. We don’t undertake any duty to update forward-looking statements. We will refer to non-GAAP measures on the call and you could find the reconciliations in our press release. I’d also like to remind you that nothing on this call constitutes and offer to sell or solicitation of an offer to purchase an interest in any of our funds. The audiocast is copyrighted and can’t be duplicated, reproduced or rebroadcast without consent.

ALSO READ:'s (AMZN) Management on Q2 2014 Results - Earnings Call Transcript

So quick recap of our results. We reported record third quarter economic net income or ENI of $0.66 that’s up from $0.56 in last year’s third quarter and it was driven by both higher performance and management fees. Distributable earnings of $672 million or $0.53 per common unit were also a third quarter and more than doubled last year’s third quarter and of that amount we will be paying a distribution of $0.44 per unit to shareholders of record as of October 27.

And with that, I will turn it over to Steve Schwarzman.

Steve Schwarzman – Chairman, CEO, Founder

Good morning and thank you for joining our call or maybe not such a good morning depending upon what you own in the markets today. Blackstone, however, has had a terrific quarter, which was a record third quarter for ENI, cash earnings and assets under management, in fact every major area, investment performance, capital raising, investment activity levels, realization, the firm is producing record or near record results.

Our investment performance continues to significantly outperform the public markets. Over the past 12 months, we have created $35 billion in total appreciation across our firm, staggering number. Even in the third quarter, most of our funds delivered returns that were multiples of their comparable market indices.

Our real estate funds were up 6% for the quarter, 28% for the past year. And our private equity fund were up 4% overall for the quarter, 28% for the prior year. Our credit to drawdown funds as Tony indicated earlier were up between 8% and 15% gross for the quarter. The stock market barely went up. And 30% to 34% for the year, altogether this is really stunning performance.

This performance along with strong demand for our alternative products continues to drive significant capital inflows to the firms. Again, it’s a positive secular backdrop of limited partner investors allocating more to alternatives, which I think we told you in prior calls was going to happen. And also reducing the number of managers, they do business with which we also indicated we thought would happen.

ALSO READ:   Starbucks' (SBUX) CEO Howard Schultz Discusses Q3 2014 Results - Earnings Call Transcript

Pages: First |1 | ... | | Last | View Full Transcript

Leave a Comment

Scroll to Top