By Isla Binnie and Arasu Kannagi Basil
NEW YORK, July 23 (Reuters) – Blackstone beat analyst expectations for second-quarter income on Thursday as the world’s largest alternative asset manager cashed in on investments, raked in new funds and reaped profits from a mammoth bet on artificial intelligence.
The New York-based company said inflows in the quarter pushed total assets to $1.35 trillion. Distributable earnings, or profit available to shareholders, rose 26% on a per-share basis to $1.52, above estimates of $1.35 provided by LSEG.
Deals to sell a stake in three data centers to Digital Realty and a majority holding in power infrastructure company Sabre Industries to TPG helped push its haul from monetizing assets to $31.8 billion.
Market volatility had hampered some deals in the first quarter, but Blackstone picked up the pace in the second, completing the listings of advertising technology company Liftoff Mobile, a data center investment vehicle called Blackstone Digital Infrastructure Trust and Indian office REIT Bagmane.
Shares swung in and out of positive territory in morning trading, as U.S. stocks fell broadly. The stock has slipped 20% this year through the last close, in line with most of its peers.
Income from exiting investments is expected to slow in the next three months but be “robust” in the following quarters, Chief Financial Officer Michael Chae told analysts, adding that the firm expects base management fees to grow at a double-digit clip in 2027.
AI MEGATREND
Blackstone is betting heavily on the growth of AI, and said nine of its top 10 best-appreciating investments are linked to AI. It holds a stake in Claude Code creator Anthropic and took data center platform QTS private for $10 billion in 2021.
CEO Stephen Schwarzman said that if Blackstone executes on its pipeline, its data center platform could double in the next two years.
“We are in the early days of what I believe will be the most consequential transformation of industry and markets in a generation,” Schwarzman said. “Our stock is on sale today. We believe it represents one of the most inexpensive ways to participate in this extraordinary megatrend,” Schwarzman added.
Schwarzman acknowledged the risk of “excessive exuberance” in AI investing, and said he had been discussing issues like job creation with leaders in the industry and policymakers.
Concerns that AI will damage software businesses have weighed in recent months on private equity and credit firms that both invested in and lent to those companies in droves. This has contributed to scrutiny on how they value assets.
Amid the upset, wealthy individuals, whose assets represent almost a quarter of the total Blackstone manages, have sought to withdraw money from private credit funds in particular.
The retail flagship Blackstone Private Credit Fund BCRED raised $1 billion in the quarter, down from $1.9 billion in the previous quarter and $3.7 billion in the same period of 2025.
But President Jon Gray said requests to redeem from BCRED have slowed “materially” in July.
Net returns from private credit improved to 0.4% from flat in the first quarter, but remained below 2.2% from a year ago.
Blackstone Private Equity Strategies and infrastructure fund BXINFRA, which are also offered to wealthy individuals, raised $2.4 billion and $861 million, respectively. Real estate investment trust BREIT, which started exercising a right to block investor redemptions in 2022, pulled in $1.2 billion.
(Reporting by Isla Binnie in New York and Arasu Kannagi Basil in Bengaluru; Editing by Arun Koyyur and Will Dunham)
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