On Tuesday, Redburn-Atlantic initiated coverage of Blackstone, the largest owner of the hotel sector in the South of Gran Canaria and shareholder of Jupama slot machines, with a neutral rating and highlighted Blackstone's significant exposure to the real estate sector and private equity. (PE), which combined, represented around 75% of the company's fee-related earnings (FRE) and distributable earnings (DE) in 2023. Blackstone president and chief operating officer Jon Gray has assured that The world's largest alternative asset manager is ready to take advantage of a recovery in property markets.
Blackstone's earnings were hit by mixed real estate results as high interest rates squeezed returns and investors pumped less money into the business. Redburn-Atlantic highlighted Blackstone's potential to benefit from any reduction in interest rates, especially in the US, as higher interest rates have previously negatively affected asset classes such as real estate and PE. The analysis noted that Blackstone's earnings potential is significant, citing that in 2023, the company reached a level of realizations comparable to the years 2018-2020, despite its fee-eligible assets under management (AuM). performance were approximately double.
Despite concerns about the housing market, Redburn-Atlantic acknowledged Blackstone's ability to command a premium within the sector. This premium is attributed to the company's sustained strong growth despite its large scale, proven track record of investment results and the strength of its brand.
