Billionaire Julian Robertson’s Top 5 Stock Picks

4. The Blackstone Group Inc. (NYSE: BX)

Value: $38,335,000
Change in Position Size: 0%
Percent of Julian Robertson’s 13F Portfolio: 8.7%

New York-based Blackstone Group is an alternative investment management business that offers investment opportunities in real estate, hedge fund solutions, private equity, credit and insurance. The firm aims to provide positive economic impact and long-term value for investors and the companies they choose to invest in. Blackstone Group currently has a $619 billion in assets under management. It achieved a $1.8 billion net income in the past quarter, and $2.26 billion for the the full year 2020. With a market capitalization of $48 billion, BX delivered a 28.58% return in the past 12 months.

There were 54 hedge funds in our database that held stakes in The Blackstone Group Inc., compared to 49 funds in the third quarter. Southport Management is the biggest stakeholder in the company. Here is what RiverPart Advisors said about BX and Apollo in its 2020 Q3 investor letter:

“Blackstone & Apollo: Our alternative asset managers BX and APO were top detractors for the quarter as their results were affected by the COVID shutdowns, which have delayed the selling of assets and the realization of performance fees. Both companies (as well as our third alternative asset manager KKR) continue to generate consistently strong fee-related earnings (BX’s and APO’s fee-related earnings increased 28% and 9%, respectively, in the second quarter) and grow their assets under management (AUM) at impressive rates (BX’s and APO’s fee-generating AUM increased 12% and 45%, respectively, year over year).

While both face a temporary slowdown in investment realizations and near-term mark-to-market headwinds from the current crisis, most of their capital is long-dated or even permanent, most of their fees, which are high-margin and recurring, are not sensitive to the market, and both have billions of dollars of capital available to invest ($156 billion and $47 billion at the end of 2Q for Blackstone and Apollo, respectively). We continue to view BX and APO as two of the better risk-reward holdings in our portfolio, offering substantially better-than-average growth and cash flow fundamentals, and world class management teams, as well as dividend yields of 2.8% and 4.2%, respectively.”