Assets Under Management: The company has been active in soliciting new investors for its funds. Since the Blackstone name is associated with quality alternative investments, and large pension funds are seeking non-correlated investment vehicles, Blackstone is able to raise significant amounts of capital to put to work in the Private Equity and Hedge Fund divisions. Access to new capital at a time when values are depressed and liquidity is scarce gives the company a competitive advantage as they can scoop up attractive investments at firesale prices.
Market Uncertainty: The economic concerns have many investors reducing risk. Blackstone's stock has been beaten down due to the fact it operates in the financial sector which has been plagued with mishaps in sub-prime and other derivative vehicles. At last check, all of Blackstone's proprietary hedge funds and fund of funds were positive for the year which sets the company apart from its peers. When the current crisis begins to receed and investors sort out the damage, it is likely that Blackstone will have weathered the storm much better than peers, and that realization could propel its stock price significantly higher.
Growing Advisory Business: Blackstone's growing advisory business, as exemplified by its role as one of Microsoft's advisers in its takeover bid of Yahoo!, will help the firm diversify away from its current heavy reliance on private equity revenues.
Conservative Pricing of Investments: Currently many assets held by Blackstone are illiquid and difficult to value. Since the real estate market is slow, it is difficult to judge what a property could sell at on the open market. Similarly, many derivatives on financial assets have not traded and there is no fair valuation for these investments. This means that management must use their best estimates for the value of such instruments. Many analysts believe that management is taking an extremely conservative view when valuing their illiquid assets and over the next few quarters those valuations could be ratcheted up substantially.