What happened Shares of Blackstone Group (NYSE: BX) climbed nearly 7% on Thursday morning after the alternative asset manager reported first-quarter earnings that blew past expectations and announced plans to convert to a corporation from a partnership. So what Blackstone, before markets opened, said it had earned $0.71 per share in the first quarter, easily surpassing the consensus estimate for $0.53 per share in earnings. Revenue, at $2.02 billion, was up 14% year over year, and total assets under management grew to $512 billion, up 14% from a year prior. Image source: Getty Images. The earnings were strong, but the conversion to a corporation is likely to be the more significant long-term story. The partnership structure has prevented some classes of investors, namely pension funds and other tax-exempt institutions, from buying shares of Blackstone, and has made the company ineligible for inclusion on certain indexes. "Blackstone has established itself as one of the leading public companies in the world, with robust long-term revenue and earnings growth and one of the most powerful brands in financial services," CEO Stephen Schwarzman said in a statement announcing the change. "We believe the decision to convert will make it significantly easier for both domestic and international investors to own our stock and should drive greater value for all of our shareholders over time." In making the move Blackstone is following in the footsteps of KKR & Co. (NYSE: KKR), which converted last year. Now what The downside to the conversion is that it will mean higher taxes for Blackstone, but last year's reduction in the U.S. corporate tax rate to 21% from 35% should ease the blow. Blackstone estimated that distributable earnings would be hit by 2% to 5% over the next five years due to the higher tax rates on a corporation. The bet Blackstone is making is that by eliminating cumbersome tax issues for investors in partnerships and opening its shares up to a broader audience, the added interest in the stock will more than make up for the higher taxes paid. At least on day one following the announcement, that bet seems to be paying off. 10 stocks we like better than The Blackstone GroupWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and The Blackstone Group wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of March 1, 2019Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool recommends KKR. The Motley Fool has a disclosure policy.Source