Blackstone has yet to decide on whether to convert from a partnership to C-corporation, but the firm has been impressed by the stock performance of rival KKR since it announced its own switch.
“We continue to analyze this option, but it’s a very significant decision for our shareholders, so we will be thoughtful and deliberate,” president Jonathan Gray said during a conference call with reporters on Thursday to discuss second-quarter earnings. “We’ve been impressed by KKR’s recent stock performance post-conversion announcement.”
KKR announced its decision to switch from a publicly traded partnership to a C-corporation on May 3, and its stock has since risen 25 percent. During the same time-frame, Blackstone’s stock has lagged behind with only a 16 percent gain.
KKR cited its stock under-performance as a reason for the conversion, and that it seeks greater participation by investors and mutual funds. The reduction in the corporate tax rate from 35 percent to 21 percent was not the motivating factor, the firm said. On July 2, KKR’s first day as a C-corp, its shares rose as much as 4.9 percent.
Gray said Blackstone has no timeline on switching to a C-corporation and that a variety of factors — aside from Blackstone’s stock performance — should be considered, such as whether the shares will be included in indexes and mutual funds.
“There’s a number of factors,” Gray said. “We can only make the decision one time and [a conversion] obviously has tax implications for our shareholders.”