Blackstone 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 and Gates Industrial Corporation.
Corporate private-equity funds appreciated by 3.5% during the quarter, compared with 8.3% growth in the benchmark S&P 500 index, Blackstone said. Its private credit funds gained 3.3% while hedge fund assets grew 1.9%. Opportunistic real estate funds were flat.
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.
