Blackstone Group LP (BX-N)

It reports Thursday. They have a giant data centre business within their company. Blackstone will tell us otherwise, that the data centre them is not over. It could help the semis stocks.

Allocations to alternative assets will only increase; they've increased 12.5x over the last 10 years (vs. 4x for regular assets), from $25 trillion today to $65 trillion by 2032. They invest big capital in areas like infrastructure and private credit. Not cheap, but worth it.

He's invested heavily in private equity, and those businesses have grown ~15% a year, which is reflected in the stocks. No reason for this to slow down, long runway. Pick your poison, buy one or all of BN, APO, KKR, or BX. Next 5 years should be a minimum of a double.

Has recovered well in recent years, but it's private equity, which is opaque--what do they own?

He bought more. It's lagged its peers and they slightly missed EPS, but they started this year with $200 billion cash and have invested $50 billion mostly infrastructure and private credit. He thinks net realization rates will increase going into 2025.

It has value and the CEO is great, including a great data centre. However, private equity is in a rocky moment now.

Holds shares in income growth fund. Private equity business located in the USA. Has been liquidating unprofitable business positions. Expecting better performance of share price going forward. Difficult to value company on a NAV basis, but is a quality company. 

Private equity is interesting here. They raised $59 billion in equity in Q4 and hold $200 billion in free cash flow to deploy. He just bought it. 

Excellent management team very strong at capital allocation. Focus on real estate created difficulties during higher interest rates. As rates stabilize, business will perform well. Will continue to own shares. 

Is up 20% in the past month. Private equity companies are benefitting huge from lower interest rates with the core business doing leveraged buyouts.  BX was down because of its exposure to real estate, but that's no longer a problem as interest rates have peaked.

Not negative on it. Well run. $1T of assets employed in the private markets. Will benefit from lower interest rates, could see positive moves off that. Not inexpensive. Watch, try to enter at a lower level.

Models $70 or 20% downside, but he thinks it will hit $43. The air is coming out of the balloon.

High real estate percentage in its portfolio. Likes the private equity space. Worried about commercial real estate amid higher interest rates, but not likely to take down the company. He owns KKR instead.

Still holds in income growth portfolio.
Was not expecting higher interest rates which has put pressure on company.
AUM still growing - $40 billion new cash in free funds to invest.
Expecting further growth going forward. 

Alternative assets are dominated by a few companies that have tremendous scale. Has really diversified beyond private equity. Caught up in market's concerns about real estate, but they're much less exposed than BN. Office represents just 2% of US real estate portfolio. 

Likely a difficult 6-18 months, but macro is close to rates peaking. Over $190B of dry powder. Best alt asset manager in the world. Can easily achieve over 15% growth in fee-related earnings over time. Yield is 3.52%.