Blackstone claims soaring inflows but economic slowdown

• Blackstone recorded a 38 percent rise in assets under management to a record-breaking $941 billion.
•  The New York-based investment firm anticipates a prolonged decline in dealmaking activity.
• Fee-based earnings and cash flows remained at record levels as a result of rising assets.

The world’s largest manager of alternative assets, Blackstone Group, is warning of a protracted downturn in economic activity as persistently rising inflation drives the Federal Reserve to continue hiking interest rates.

“The economy today on the ground is still pretty healthy, but we’re definitely seeing some signs of a slowdown,” Blackstone’s president Jonathan Gray told the Financial Times. “Because we see inflation as stickier, in labour and housing markets, in particular, I think it will mean the Fed will try to do more and slow the economy further.”

As a result of an increasingly active central bank, Blackstone anticipates a prolonged decline in dealmaking activity from last year’s record levels, with Gray warning that they have “seen a material reduction in deal activity.”

Also Read

Ukraine devalues its currency compared to the US dollar by 25%

Ukraine devalues its currency, the hryvnia, by 25% relative to the US...

Blackstone recorded sustained increase in assets under management as investors piled into private investing strategies, but wrote down the value of some of its famous private equity, credit, and real estate funds in its second-quarter results released on Thursday.

A total of $88 billion in new investor funds poured into the New York-based investment firm, bringing its assets under management to a record-breaking $941 billion, a 38 percent rise from the same time last year.

Despite a strong sell-off in public equities markets to begin the year, Blackstone’s fee-based earnings and cash flows remained at record levels as a result of its rising assets.

Analysts like distributable earnings as a proxy for total cash flows; they increased 86 percent to $2 billion, or $1.49 per share, from the same time last year. These results narrowly exceeded analyst predictions.