Blackstone’s quarterly profits fall 39% as asset sales fall

By Chibuike Oguh

NEW YORK (Reuters) – Blackstone Inc said on Thursday its second-quarter distributable profit fell nearly 40%, due to a sharp decline in asset sales stemming mainly from its real estate and credit businesses.

Distributable income, which represents cash used to pay dividends to shareholders, fell to $1.2 billion from nearly $2 billion a year earlier. That resulted in a distributable profit of 93 cents, in line with the average analyst estimate, according to Refinitiv.

Blackstone said its net profit from asset sales fell 82% to $388.4 million from $2.2 billion a year ago as rising interest rates, lingering inflation and economic uncertainty continued to weigh on its mergers and acquisitions activity.

A significant portion of the reduction in asset disposals came from Blackstone’s real estate unit, where its net profit fell 94%, while that of its credit division fell 46%.

Still, its private equity business saw 20% growth in performance fees, driven by sales of secondary shares of Blackstone’s stake in London Stock Exchange Group and Gates Industrial Corporation.

Private equity funds from companies appreciated 9.7%, compared to 8.3% growth in the benchmark S&P 500, Blackstone said. Its private credit funds gained 12.7% while hedge fund assets rose 1.9%. Opportunistic real estate funds depreciated by 3% over the quarter.

According to generally accepted accounting principles (GAAP), Blackstone’s net income was $601.3 million, compared to a net loss of $29.4 million due to a rebound in performance fee income and major investments.

Blackstone’s total assets under management reached the $1 trillion milestone for the first time and was in line with its earlier outlook, supported by strong fundraising of $30.1 billion in the quarter. It also had about $195 billion in unspent capital and declared a quarterly dividend of 79 cents per share.

(Reporting by Chibuike Oguh in New York; Editing by Sherry Jacob-Phillips)