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By Arasu Kannagi Basil and Isla Binnie

Oct 23 (Reuters) - Blackstone's BX.N pipeline for initial public offerings indicates the firm could be about to kick off one of the biggest years in its history for such deals, while total assets under management rose to a record $1.24 trillion, executives said on Thursday.

Transactions have come thick and fast in recent months after volatility earlier in the year following U.S. President Donald Trump's announcement of tariffs on imports, as corporate boardrooms adapt to persistent uncertainty.

"It takes time to get IPOs done, it takes time to get sales processes done but the overall outlook you keep hearing from us is getting better. This deal dam is breaking and should lead to more realizations over time," President and Chief Operating Officer Jon Gray told analysts during a call to present third-quarter earnings that beat consensus estimates.

Piper Sandler analyst Crispin Love said Blackstone surpassing expectations was due to performance revenues, largely thanks to the pick-up in deal activity.

"It's been a very slow few years for transaction activity, IPOs, so there's plenty of pent-up demand and you're beginning to see that come through," Love said.

This "sets up extremely well for 2026, where you could see a big year for IPO activity and realization."

EARNINGS BEAT

Distributable earnings, or cash that can be used to pay dividends to shareholders, jumped 48% to $1.89 billion, or $1.52 per share, in the quarter. Analysts had expected $1.23 per share, according to estimates compiled by LSEG.

Blackstone sold a total of $30 billion of investments in the quarter, including $9.3 billion in private equity assets, more than doubling earnings from that part of the business from the previous three months.

The traditional private equity model of buying and selling businesses has snarled recently as firms try to offload assets acquired during periods of much lower interest rates.

The shift this quarter saw Blackstone take three companies public, including energy and maintenance services provider Legence.

In credit, it led a $7 billion investment in a liquefied natural gas facility owned by Sempra SRE.N in Texas.

In all, Blackstone deployed $26.6 billion of capital in the quarter and has $188.1 billion in dry powder.

Keeping up momentum into the fourth quarter, Blackstone teamed up with private equity peer TPG TPG.O to take medical diagnostics firm Hologic HOLX.O private in a deal valued at up to $18.3 billion.

Shares of the world's largest alternative asset manager fell 5%. The stock has now fallen over 10% this year.

CREDIT

Blackstone's credit and insurance arm accounted for nearly two-thirds of the $54.2 billion in inflows in the quarter. boosting total assets under management to $1.24 trillion which President and Chief Executive Officer Stephen Schwarzman said was an "industry record".

Asked about the credit market in light of recent high-profile bankruptcies, Gray said the recent issues were idiosyncratic and Blackstone didn't see a lot of credit issues broadly.

"In direct lending specifically, we've experienced annualized realized losses of one-tenth of one percent," Schwarzman said, adding that Blackstone's investment grade-focused private credit platform in BXCI has experienced zero realized losses to date.

Alternative asset managers' stocks have weakened in recent weeks as the bankruptcies of auto parts retailer First Brands and subprime lender Tricolor stoked investor concerns on credit risks.

"Of course, as the cycle progresses, it's reasonable to assume we'll see some increase in defaults," Schwarzman said.

PRUDENCE AROUND DATA CENTERS

Schwarzman highlighted investments in digital and energy infrastructure as areas for future growth. Within private equity, its infrastructure strategy performed best.

Demand in the data center space has continued to grow, with Blackstone's portfolio seeing a doubling in its data center leasing pipeline globally in the third quarter from the previous three months, Gray said.

Asked about whether there was a bubble in data center investments, Gray said that while some people may be concerned, the world's need to power compute were going up.

"The key for us … is to make sure we do this in a prudent way," Gray said, saying the firm would look for long-term leases and assess tenants' credit quality.

(Reporting by Isla Binnie in New York and Arasu Kannagi Basil in Bengaluru; Editing by Sriraj Kalluvila, Kirsten Donovan and Nick Zieminski)

((ArasuKannagi.Basil@thomsonreuters.com;))