The largest private equity firm in the world, Blackstone Inc. (BX.N), reported on Thursday that a fall in asset sales from its real estate sector caused a steeper-than-expected 12% year-over-year decline in its third-quarter distributable earnings.
The amount of money available to pay dividends to shareholders, or what is known as distributable profits, decreased from $1.4 billion a year earlier to $1.2 billion in the quarter. According to LSEG statistics, it amounted to 94 cents in distributable earnings per share, falling short of the $1.01 average analyst projection.
Blackstone reported that rising interest rates and geopolitical concerns that have slowed down global merger and acquisition activity caused its net profit from asset sales to decline 36% to $259.4 million.
Realized performance revenue fell by 88% to $17.4 million in Blackstone’s real estate segment, where asset sales were particularly weak. Earnings from fees, such as those from lucrative management and advisory fees, decreased 5% to $1.12 billion.
During the quarter, Blackstone became the first private equity company to join the S&P 500 (.SPX) index. Its market value is $125 billion, and manages more than $1 trillion in total assets.
Blackstone said its private equity portfolio increased by 2.4% during the same time, as opposed to the S&P 500’s 3.65% loss. Private credit funds increased by 4.6%, while infrastructure funds increased by 11%. Investment-grade real estate funds decreased by 2%.
According to generally accepted accounting standards (GAAP), performance fees and investment income helped Blackstone’s net income jump to $552 million in the quarter from $2.3 million a year earlier.
During the quarter, Blackstone received $25.3 billion in new funding, spent $12.4 billion on fresh acquisitions, and held onto $200.6 billion in unspent funds. It announced an 80-cent dividend per share.
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