© Reuters. FILE PHOTO: The ticker and trading information for Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid/File Photo
By Chibuike Oguh
NEW YORK (Reuters) – Blackstone (NYSE:) Inc said on Thursday its second-quarter distributable earnings slumped nearly 40%, owing to a sharp drop in asset sales mostly from its real estate and credit businesses.
Distributable earnings, which represent cash used to pay dividends to shareholders, fell to $1.2 billion from nearly $2 billion a year earlier. That resulted in distributable earnings of 93 cents, in line with average analyst estimate, as per Refinitiv.
Blackstone said its net profit from asset sales plunged 82% to $388.4 million from $2.2 billion in the year-ago period, as higher interest rates, sticky inflation, and economic uncertainty have continued to weigh on its merger-and-acquisition activity.
A major share of the reduced asset disposals came from Blackstone’s real estate unit, where its net profit sank 94%, while that of its credit division dropped 46%.
Still, its private-equity business saw a 20% growth in performance fees, driven by secondary share sales of Blackstone’s stake in London Stock Exchange Group (LON:) and Gates Industrial (NYSE:) Corporation.
Corporate private-equity funds appreciated by 9.7%, compared with an 8.3% growth in the benchmark , Blackstone said. Its private credit funds gained 12.7% while hedge fund assets grew 1.9%. Opportunistic real estate funds depreciated by 3% in the quarter.
Under generally accepted accounting principles (GAAP), Blackstone’s net income came in at $601.3 million, versus a net loss of $29.4 million due to a rebound in revenue from performance fees and principal investments.
Blackstone’s total assets under management hit the $1 trillion milestone for the first time, and were in line with its prior outlook, underpinned by strong fundraising of $30.1 billion in the quarter. It also had about $195 billion of unspent capital and declared a quarterly dividend of 79 cents per share.
