UPDATE: BMO Capital Markets Reiterates Outperform Rating, Raises PT on Blackstone Group

In a report published Friday, BMO Capital Markets reiterated its Outperform rating on Blackstone Group BX, and raised its price target from $19.00 to $21.00. BMO Capital Markets noted, “Blackstone reported 4Q12 ENI per unit of $0.59, which beat our estimate of $0.44 and consensus of $0.47, owing mainly to higher-than-expected transaction and advisory fees (delta of $0.07 per unit). Key takeaways include 1) performance of Blackstone's underlying investment funds was mostly better than expected with private equity funds appreciating 7.0% (vs. BMO estimate of 4.0%), real estate funds up 3.7% (vs. 3.3%), hedge fund solutions composite up 2.2% (vs. 2.8%), and credit hedge funds up 3.8% (vs. 2.6%), 2) the portfolio is ripe for realizations in 2013 with the real estate segment providing the most exit opportunities and management expects private equity M&A deal activity to be up 10%-20% over 2012, 3) Blackstone continues to find attractive investment opportunities and put to work $5.3B of LP capital in PE and RE funds, while returning $3.7B to PE and RE LPs in the quarter; dry powder is significant at $35B, and 4) BX changed its distribution policy to be more favorable, in our view, as it will pay out a majority of distributable earnings immediately after the quarter earned rather than paying a year-end true-up.” Blackstone Group closed on Thursday at $18.50.