2 min read.Updated: 18 Apr 2019, 06:05 PM ISTReuters
Blackstone is hoping the move will boost its share price, which has traded at a discount
Blackstone will pay corporate taxes on all its revenue, in exchange for enabling investors such as mutual funds and index trackers to buy the stock
NEW YORK :
Blackstone Group LP, the world's largest manager of alternative assets such as private equity and real estate, said on Thursday it would convert from a partnership to a corporation, in a bid to get more investors into its stock.
Blackstone is hoping the move, which will take effect July 1, will boost its share price, which has traded at a discount to traditional asset managers such as BlackRock Inc for more than a decade.
"We believe the decision to convert will make it significantly easier for both domestic and international investors to own our stock and should drive greater value for all of our shareholders over time," Blackstone Chief Executive Stephen Schwarzman said in a statement.
Blackstone also announced first-quarter earnings on Thursday, reporting distributable earnings - the actual cash available for paying dividends - of $538 million in the first quarter, up from $502 million a year earlier.
This translated to distributable earnings per share of 41 cents, lower than the 51 cents analysts had predicted on average based on Refinitiv data.
Nevertheless, the announcement of the switch to a corporation sent Blackstone shares surging about 10 percent in premarket trading to $39.20.
Fee-related earnings, the amount Blackstone earns from management fees, were up 11 percent year-on-year at $374 million.
Blackstone said its assets under management reached $512 billion at the end of March, up 14 percent from a year ago.
The firm’s private equity portfolio appreciated 4.6 percent in the quarter, as the stock market rallied.
Blackstone declared a first-quarter dividend of 37 cents per share.
This story has been published from a wire agency feed without modifications to the text.
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Never miss a story! Stay connected and informed with Mint.
our App Now!!