Wrapping up Q2 earnings, we look at the numbers and key takeaways for the asset management stocks, including Blackstone (NYSE: BX) and its peers.
Asset management firms oversee investment portfolios for institutions and individuals. The industry benefits from the growing global wealth pool, retirement savings needs, and expansion into alternative investments (private equity, real estate, etc.). However, firms face significant pressure from the shift to lower-cost passive investment products, regulatory requirements for fee transparency, and increasing technology costs to stay competitive in portfolio management and client service.
The 5 asset management stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.3%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.7% since the latest earnings results.
Best Q2: Blackstone (NYSE: BX)
With over $1 trillion in assets under management and investments spanning real estate, private equity, credit, and hedge funds, Blackstone (NYSE: BX) is a global alternative asset manager that invests capital on behalf of pension funds, sovereign wealth funds, and other institutional investors.
Blackstone reported revenues of $3.10 billion, up 22.9% year on year. This print exceeded analysts’ expectations by 8.6%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ revenue estimates and an impressive beat of analysts’ fee-related earnings estimates.
Blackstone pulled off the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 11% since reporting and currently trades at $153.13.
TPG (NASDAQ: TPG)
Founded in 1992 and managing over 300 active portfolio companies across more than 30 countries, TPG (NASDAQ: TPG) is a global alternative asset management firm that invests across private equity, credit, real estate, and public market strategies.
TPG reported revenues of $489.4 million, up 5.3% year on year, outperforming analysts’ expectations by 5.2%. The business had an exceptional quarter with a beat of analysts’ EPS and revenue estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.7% since reporting. It currently trades at $55.
Is now the time to buy TPG? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Ares (NYSE: ARES)
With roots in the leveraged finance group of Apollo Management, Ares Management (NYSE: ARES) is an alternative investment firm that manages private equity, credit, real estate, and infrastructure assets for institutional and high-net-worth clients.
Ares reported revenues of $1.02 billion, up 16.2% year on year, falling short of analysts’ expectations by 1.1%. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates and a slight miss of analysts’ management fees estimates.
Ares delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 24.8% since the results and currently trades at $139.50.
Read our full analysis of Ares’s results here.
Artisan Partners (NYSE: APAM)
Founded in 1994 with a focus on autonomous investment teams and a "high-value-added" approach, Artisan Partners (NYSE: APAM) is an investment management firm that offers actively managed equity and fixed income strategies to institutional and individual investors.
Artisan Partners reported revenues of $282.7 million, up 4.4% year on year. This print beat analysts’ expectations by 0.8%. Aside from that, it was a mixed quarter as it failed to impress in some other areas of the business.
Artisan Partners had the slowest revenue growth among its peers. The stock is down 6.4% since reporting and currently trades at $42.89.
Read our full, actionable report on Artisan Partners here, it’s free for active Edge members.
Carlyle (NASDAQ: CG)
Founded in 1987 with just $5 million in capital and named after the iconic New York hotel where the founders first met, The Carlyle Group (NASDAQ: CG) is a global investment firm that raises, manages, and deploys capital across private equity, credit, and investment solutions.
Carlyle reported revenues of $984 million, up 24.7% year on year. This number surpassed analysts’ expectations by 8%. It was an exceptional quarter as it also recorded an impressive beat of analysts’ fee-related earnings estimates and a solid beat of analysts’ revenue estimates.
Carlyle achieved the fastest revenue growth among its peers. The stock is down 7.5% since reporting and currently trades at $55.59.
Read our full, actionable report on Carlyle here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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