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.

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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.

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Reporting by Chibuike Oguh in New York

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Sallie R. Loera