By Luis Garcia

Blackstone sees investment opportunities in tariff-driven market turbulence, as the private-equity giant sits on a $177 billion cash pile while increasingly raising capital from individual investors.

"Uncertainty around tariffs and their potential impact on economic growth and inflation has dramatically impacted investor sentiment," said Blackstone Chief Executive Stephen Schwarzman. He spoke Thursday during a call with analysts to discuss the New York-based asset manager's results during this year's first quarter.

"Our experience through many economic and market downturns has taught us some of the best times to deploy capital are in a risk-off world when sentiment is most negative" he said.

Schwarzman said that it is early to evaluate the "full implication of tariffs" as it will depend on trade negotiations between the U.S. and other countries. He noted that the economy remains strong except in a few areas such as real estate, where rising construction costs are suppressing activity.

"[The] most important questions are how sustained will this period of uncertainty be and what are the second-order consequences, both domestically and for foreign countries," he said. The $177.2 billion that Blackstone had in available capital to invest, or dry powder, at the end of March can help the firm "take advantage of the opportunities that arise," he added.

Blackstone particularly sees opportunities to take publicly traded companies private as their share prices fall, said President and Chief Operating Officer Jonathan Gray.

"When stock prices trade off, the receptivity from boards [of directors] to our prices may be better," he said. "Having $177 billion of dry powder and some real long-term conviction in the sectors we like...we are going to see this as an opportunity to put out more capital." As examples, he cited sectors such as digital infrastructure, energy and power, life sciences and commercial real estate, as well as markets such as India and Japan.

He added, however, that market volatility can increase the cost of deal financing and make it more difficult for private-equity firms to sell assets. "The faster this tariff diplomacy can play out, the better it would be for the economy and markets," Gray said

Blackstone raised $61.6 billion during the first quarter, helping lift its total asset under management to $1.17 trillion. Inflows included capital for its clean energy-focused Blackstone Energy Transition Partners IV fund, which wrapped up in February with $5.6 billion. The firm also recently closed its latest flagship private-equity fund with roughly $21 billion, Gray said. Private-wealth strategies, or funds dedicated to individual investors, took in about $11 billion during this year's first quarter, nearly 40% more than in the year-earlier period and the highest level in three years, according to Gray.

Blackstone, which is a pioneer in private-equity firms' increased efforts to attract individual investors, this week announced that it joined with asset managers Vanguard and Wellington Management to offer individual investors access to portfolios comprising both public and private assets. Blackstone has four strategies dedicated to individual investors, including private-equity, infrastructure, real-estate and credit funds that allowed for limited, periodic redemptions. A fifth, credit-focused strategy is in the works, Gray said.

Blackstone ended March with more than $270 billion across its private wealth strategies, nearly a quarter of the firm's total assets under management, Schwarzman said. "Our vision in this area from the beginning was to provide individuals the same access to private-market [assets] that many institutions have enjoyed for decades," he added.

Blackstone reported distributable earnings, or cash that could be returned to shareholders, of $1.41 billion for the period, or $1.09 a share, about 11% more than the $1.27 billion, or 98 cents a share, in the year-earlier period.

Net income dropped 27% to $614.9 million, or 80 cents a share, compared with $847.4 million, or $1.11 a share, a year earlier. Revenues decreased about 11%, to $3.29 billion. But fee-related earnings, a metric highly watched by analysts, rose to $1.26 billion, 8.8% higher than in last year's first quarter.

Blackstone's stock price rose by about 1.6%, to around $131.40 a share, in afternoon trading Thursday, after the firm announced its financial results.

Write to Luis Garcia at luis.garcia@wsj.com

(END) Dow Jones Newswires

April 17, 2025 14:50 ET (18:50 GMT)

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