Blackstone (BX) Soars 3.51% on 25% Earnings Surge

Blackstone's stock rose 3.51% in pre-market trading on July 24, 2025, driven by strong financial performance in the second quarter.

Blackstone reported a significant 25% increase in distributable earnings, primarily due to strong contributions from its retail funds and perpetual funds. The company's various funds, including those targeting high-net-worth clients and large real estate trusts, generated substantial incentive fees. These perpetual funds can collect fees without actually realizing investment gains, as long as they meet certain performance thresholds.

Blackstone's "fee-related performance income" surged 167% year-over-year, totaling $4.72 billion. This unexpected windfall helped alleviate the challenges faced by Blackstone and its competitors in generating returns from investments made during the low-interest rate period. Despite the rise in interest rates and the trade wars initiated by former U.S. President Trump, Blackstone's retail business continued to support its performance.

Jon Gray, Blackstone's President, highlighted that the perpetual fund business has been a strong driver of growth, especially in challenging environments. He noted that this has allowed the company to earn substantial incentive fee income even in tougher market conditions, demonstrating the breadth of their business.

Distributable earnings, or the profit available to shareholders, reached $15.7 billion, equivalent to $1.21 per share, exceeding market expectations of $1.10 per share. In addition to incentive fees, new fund inflows drove a 13% increase in management fees, with approximately one-fifth of the $520 billion raised in the quarter coming from private wealth channels.

By mid-year, Blackstone managed $280 billion in assets for private wealth clients, about a quarter of its total $1.2 trillion in managed assets. However, the company's net realized gains for the quarter were only 63% of what they were four years ago, with varying performance across different business segments. The private equity division saw a 12% year-over-year increase in net realized gains, while the real estate business experienced a 37% decline.

Gray noted that while the real estate market is showing signs of recovery, it has not yet reached a breakthrough. He cited lower transaction debt costs and reduced supply as reasons for optimism. Blackstone's credit and insurance divisions continued to thrive, accounting for more than half of the company's net inflows for the quarter. Gray also mentioned that trading channels have expanded following the tariffs imposed by the U.S. government in April.