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Blackstone Group CEO On Phenomenal Q1 Results, $30B Raised In New Money And The Firm's Momentum

Blackstone Group CEO On Phenomenal Q1 Results, $30B Raised In New Money And The Firm's Momentum

Blackstone Group LP (NYSE: BX) came out with better-than-expected quarterly earnings Thursday morning. EPS of the company rose 10 percent year-over-year to $4.98, while revenue came in at $2.72 billion, a marginal improvement of 1 percent from the same quarter last year.

Blackstone Co-founder and CEO Steve Schwarzman was on Bloomberg following the earnings declaration to weigh in on the results.

Simple Business

"I think we've been keeping our momentum going for a long time," Schwarzman said. "Over the last five years, our earnings have been compounding at 46 percent.

"In the latest quarter, we raised $30 billion of new money for our products, and that is more money than any alternative manager other than ourselves has raised for an entire year. We are in a simple business, and we have been in it for 30 years."

Related Link: Blackstone Tops Q1 Views, Shares Rise

Safety And Business

"And our job is basically just to earn very high returns with very low risk. And we have been compounding around ten percent, or 1,000 basis points, more than the stock market."

Schwarzman continued, "If we can do something like that over a 30-year period in a world of very low interest rates – that if you're a large pool of capital or if you're just a person, you can use that type of return. And that is the business that we are in, doing it with safety."

The Law Of Large Numbers

Schwarzman was asked why he thinks he can’t keep raising $30 billion a quarter for growth like he disclosed doing in the latest quarter. He replied, "We can't deploy the amount of money that you would have if you had, sort of, $120 billion of alternative asset money come right into us."

He explained, "We have $311 billion right now. And this year, we invested $26 billion. And the firm keeps growing at a really good, a good clip.

"And as we grow, we invest more and more money. If we earn the same return, our earnings just keep going up and our distributions go up," Schwarzman concluded.

Image Credit: Public Domain


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