Is Blackstone a Misunderstood Compounder? With John Rotonti (Ticker: BX)
This week on the podcast we brought back John Rotonti from the Motley Fool to discuss Blackstone, the largest alternative asset manager in the world. Here are some questions we asked him:
What is your thesis in Blackstone?
Can you give some history of Blackstone? How did it become the world’s largest alternative asset manager?
What does Blackstone look like today and how does Blackstone make money?
We already did a deep dive on KKR. What are the differences between KKR and Blackstone?
Please explain carried interest and why it’s such a negative for alternative asset managers?
It seems like Blackstone's revenue can be quite volatile. Why is that?
While we are on accounting, Blackstone’s profit margins are incredibly high. Please explain the business model that results in such high pre-tax margins.
How important is dry powder to the Blackstone growth story?
Speaking of high net worth investors, Blackstone stock has been selling off recently on news that BREIT is receiving redemption requests. What’s going on here?
While we are on BREIT can you explain how higher rates affect Blackstone’s real estate business?
What are Blackstone’s competitive advantages?
Premortem: How could an investment in Blackstone go poorly?
Disclosure: The author and podcast guests are not your financial advisors. Ryan Henderson and Brett Schafer are general partners and portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this show.