Blackstone’s profits fall 16% due to a sharp drop in asset sales

NEW YORK, Oct 20 (Reuters) – Blackstone Inc (BX.N), the world’s largest alternative asset manager, said on Thursday its third-quarter distributable profit fell 16% year-on-year, due to a sharp drop in asset sales. in the midst of a market downturn.

Distributable earnings — cash used to pay dividends to shareholders — fell to $1.4 billion from $1.6 billion a year earlier. That translated into distributable earnings per share of $1.06, up from $1.28 a year ago, but slightly above analysts’ average estimate of 99 cents, according to Refinitiv.

Financial markets have been rocked by geopolitical turmoil from the Russian-Ukrainian conflict and rising central bank interest rates, which have prevented private equity firms like Blackstone from cashing in their investments for the big dollar.

Join now for FREE unlimited access to

Blackstone said its net profit from asset disposals across its portfolio, including real estate, private equity and hedge funds, fell 61% to $402.6 million, from $1.03 billion a year ago, amid the turmoil.

During the quarter, Blackstone said its opportunistic real estate funds fell 0.6%, corporate private equity funds depreciated 0.3% and hedge funds gained 1%. In comparison, the benchmark S&P 500 index (.SPX) fell 5.28% over the same period.

According to generally accepted accounting principles, Blackstone reported net income of just $2.3 million, a massive drop from $1.4 billion a year earlier, due to unrealized investment losses of $1. .1 billion dollars.

Blackstone’s fee-related revenue, a closely watched metric that relies on lucrative management fee revenue, jumped 51% to $1.2 billion, driven by growth in its lending business and the conclusion of a deal. asset management agreements reached last year with insurance companies, including American International Group Inc (AIG.N) and Allstate Corporation (ALL.N).

Blackstone also said it invested $31.3 billion in new acquisitions during the quarter, retained $182 billion in unspent capital, raised $45 billion in new capital and had total assets under management of $951 billion. dollars. It declared a dividend of 90 cents per share.

Join now for FREE unlimited access to

Reporting by Chibuike Oguh in New York

Our standards: The Thomson Reuters Trust Principles.

Sallie R. Loera