Blackstone braces for its Beta test

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Signage is seen outside The Blackstone Group headquarters in Manhattan, New York, U.S., November 12, 2021.

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NEW YORK, Jan 27 (Reuters Breakingviews) - Blackstone (BX.N) had a record year. President Jonathan Gray says the last 12 months were the $140 billion asset manager’s best yet for appreciation on the funds it manages. Its stock hasn’t done badly either. Following a more than 7% jump after releasing fourth-quarter earnings on Thursday, the shares have returned more than 300% in three years, including dividends, versus a 73% return on the S&P 500 Index.

Part of that is Blackstone changing its asset mix. As Gray noted, perpetual assets under management, which don’t have the same exit deadlines as traditional buyout and property funds, are up threefold since the company’s 2018 investor day. That gives shareholders some comfort that Blackstone’s portfolio won’t dwindle in a market downturn.

But some fees still depend on its asset base. And the Beta on Blackstone’s stock, a reflection of how closely it follows the wider equity market, is a relatively volatile 1.4, according to Refinitiv. The real test of Blackstone’s revamp is how it performs when asset prices fall and interest rates rise read more . (By Lauren Silva Laughlin)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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Editing by Peter Thal Larsen and Sharon Lam

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