NEW YORK, Oct 17 (Reuters) - Blackstone beat Wall

Street's expectations on its key quarterly earnings metric on

Thursday, as the world's largest alternative investment firm's

assets under management (AUM) hit a record $1.1 trillion and the

value of its funds rose.

New York-based Blackstone said it saw $41 billion of inflows

during the third quarter, while it deployed and committed $54

billion of capital - the highest in over two years - amid a

revival in dealmaking activity as the U.S. Federal Reserve cut

rates and the economic outlook remained sanguine.

Over the past few quarters, high interest rates had been a

drag on some aspects of Blackstone's business. With the Fed now

entering into an easing cycle, the firm saw that weight starting

to lift.

The company's private equity funds appreciated by 6.2% in

the quarter and its infrastructure funds by 5.5%, contributing

to Blackstone's highest fund appreciation in three years.

Chief Executive Steve Schwarzman hailed the results as

"broad-based acceleration across our business."

Blackstone's distributable earnings, which represent cash

that can be used to pay dividends, totaled $1.3 billion in the

third quarter, up 6% from the previous year. This translated

into distributable earnings per share of $1.01, surpassing

analysts' average estimate of $0.92, according to LSEG data.

Fundraising during the quarter was led by credit. It said

private wealth AUM hit $250 billion, with individual fundraising

nearly doubling year-to-date compared to the previous year.

Among Blackstone's major deals in the quarter was a $16

billion acquisition of Australia's AirTrunk, which furthered the

fund's hold in the data center market supporting cloud services

and AI. It also agreed to acquire U.S. software firm Smartsheet

for $8.4 billion, including debt, along with Vista Equity

Partners.

The firm's market capitalization now stands at $195 billion,

with its stock reaching an all-time closing high of $159.71 on

Oct. 16.

(Reporting by Echo Wang in New York; Editing by Paritosh Bansal

and Muralikumar Anantharaman)