Blackstone Thinks It’s High Time for a Public Listing Blitz

The IPO market may seem dead in the water, but Blackstone can be forgiven for feeling invincible. 

On Thursday, amid a strong earnings call, the private equity giant announced that it is planning to take some of its portfolio companies public. “When you have this strong of an equity market it’s almost like a magnet pulling companies out of the private market,” Blackstone president Jonathan Gray told the Financial Times.

Public Notice

Life is pretty good for the world’s largest alternative asset manager. Assets under management climbed to a titanic $1.1 trillion in the latest quarter, the company reported, a new record. Meanwhile, distributable earnings — a.k.a. cash that can be used for shareholder dividends — increased 6% year-over-year to hit $1.3 billion in the third quarter. And now in a new era of easing interest rates, things might get even better.

Rate cuts the world over have already helped spur a dealmaking flurry at Blackstone. The firm invested $34 billion this past quarter, more than any quarter in the past two years. Its PE funds appreciated by over 6% in the quarter, contributing to the firm’s highest overall fund appreciation period in over three years. Still, “realizations are the one engine that has been muted,” Gray told the FT. But with falling rates and a white-hot equities market, renewed investor interest in the IPO market is on the horizon — and Blackstone’s portfolio appears ready to be cashed out:

• Gray noted that the biggest companies in its portfolio are among the most listable. That includes companies such as payroll software group UKG and health supplies company Medline Industries. Blackstone also sits on $70 billion worth of data centers.
• The listings could revive a sleepy IPO market. IPOs have raised just $77.6 billion through the first nine months of the year, per EY figures, down 23% from 2023 and just a fraction of the record amount seen in 2021. Still, Blackstone isn’t alone in sizing up a rebounding market — major PE players like BC Partners and Carlyle have also been moving to list larger portfolio companies.

Credit Report: While the lack of public listings has slowed Blackstone’s exits, the firm’s been buoyed by massive growth in its credit and insurance arm, which took in over $21 billion in the third quarter, becoming its biggest unit by assets. Shares of Blackstone surged roughly 7% to a new record high on the strong earnings beat, and are up about 32% overall year-to-date. If anyone can thaw this frozen IPO marketplace, it’s probably Blackstone.