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Blackstone Group  (BX -2.54% ) has become a big-time dividend stock in recent years. The leading alternative asset manager returns a significant portion of its distributable earnings to investors via dividends. Over the past year, it has paid out over $5 per share in dividends, giving it an annualized yield of more than 6%. That's multiples above the  S&P 500 's current 1.8% dividend yield.

A big driver of Blackstone's ability to pay a sizable dividend is its large and growing pool of assets under management (AUM). As AUM grows, Blackstone can earn more recurring management fees and capture the additional upside potential from performance revenues as its investment funds meet their return objectives. The company recently made a big move to boost its AUM, which could pay big dividends down the road.

Blackstone is forming a strategic partnership with Resolution Life, a leading global life and annuity insurance consolidation business. The alternative asset management giant is investing $500 million into Resolution Life as part of that company's plan to raise $3 billion of new equity capital to pursue its acquisition strategy. Blackstone will become Resolution Life's investment manager for certain areas, including in the private credit, real estate , and asset-based finance markets. 

Blackstone will initially manage up to $25 billion of Resolution Life's existing private assets in the first year. Meanwhile, that number will grow as Resolution Life completes new transactions and investments deployed in asset classes managed by Blackstone. Blackstone sees it rising to more than $60 billion over the next six years.

That will provide Blackstone with a growing stream of recurring management fees as it manages those assets for Resolution Life. It will also enhance Blackstone's ability to capitalize on compelling investment opportunities, since it will have a perpetual source of capital at its disposal.

Blackstone makes a lot of money managing assets on behalf of clients. The company had $940.8 million of AUM at the end of the second quarter -- up 38% year over year -- $683.8 million of which are fee-bearing, a 37% increase. The surging AUM helped grow Blackstone's fee-related earnings by 45% in the second quarter to $1 billion.

It has produced over $4.8 billion of fee-related earnings in the past year. Add in its performance revenues, and Blackstone's total distributable earnings were $7.8 billion ($6.03 per share) over the last 12 months. It returned all that money to shareholders via its dividend  and  share repurchases .

The company has seen a surge of inflows over the past year as  more investors allocate capital to alternative investments , given the volatility in the public stock and bond markets. Inflows totaled $88.3 million in the second quarter alone, the company's second-best quarter and equal to its entire AUM at its IPO. Meanwhile, AUM has grown by $339.7 billion over the past year.

While billions of dollars have flowed into Blackstone over the past year, the company has also seen outflows as funds mature and it returns capital to investors. The company's fee-bearing AUM saw outflows of $38 billion over the past year, meaning it's no longer earning fees on this capital.

Even though net inflows have more than offset outflows, Blackstone has been focusing on growing its perpetual capital sources to further mute the effect of outflows. That strategy helped fuel a 110% surge in perpetual capital AUM to $355.9 million in the second quarter.

These perpetual sources of capital provide it with an even more sustainable supply of recurring management fees, since Blackstone won't eventually need to return that capital to investors. With the Resolution Life deal adding more than $60 billion to Blackstone's perpetual capital in the coming years, it will provide another huge and growing source of stable income that the company can use to pay dividends.

Blackstone's asset management business supplies it with lots of recurring income. Meanwhile, it makes additional money through performance revenues. While performance revenues rise and fall with its investment successes, its fee-bearing earnings should keep growing, especially as its perpetual capital sources grow. That should continue to raise the floor under Blackstone's dividend, enabling it to keep making sizable payments to shareholders, and further adding to its appeal as an income stock.

Matthew DiLallo has positions in Blackstone Inc. The Motley Fool has positions in and recommends Blackstone Inc. The Motley Fool has a disclosure policy.

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