$18 billion asset management firm Blackstone Group (BX) is coming off the heels of a blockbuster year for shareholders. In the last 12 months, Blackstone has rallied 91%, besting the S&P's impressive returns last year by a factor of three.
That's not hugely surprising, though. As an investment advisory firm, Blackstone is basically a leveraged bet on the public and private equity market. That means that the firm is positioned to continue to outperform in 2014.
Blackstone offers its clients exposure to a wide array of alternative investments, ranging from private equity funds to real estate and hedge funds. That non-traditional asset base is the reason why BX outperformed other investment firms by such a wide margin. As correlations across traditional investment options remain high, high-net-worth and institutional investors should remain willing to shell out more cash for the alternatives that Blackstone provides.
Scale matters a lot for Blackstone. Because the firm is one of the largest private equity names in the world, with around $250 billion in assets under management, it's able to orchestrate big-ticket deals that smaller names can't. The firm's expertise in guiding privately held portfolio companies has also borne a lucrative advisory business, a high-moat business that newcomers can't simply hold out a shingle and expect to succeed in.
With rising analyst sentiment in shares this week, we're betting on Blackstone.