Blackstone Inc, the world's largest private equity firm, said on Thursday that its third-quarter distributable earnings fell by a steeper-than-expected 12% year-on-year owing to a decline in asset sales from its real estate business.
Distributable earnings, which represents the cash available to pay dividends to shareholders, fell to $1.2 billion in the quarter, from $1.4 billion a year earlier. That translated to distributable earnings per share of 94 cents, which missed the average analyst estimate of $1.01, according to LSEG data.
Blackstone said its net profit from asset sales fell 36% to $259.4 million, weighed down by higher interest rates and geopolitical tensions that have restricted global mergers and acquisitions activity.
The slump in asset sales was concentrated in Blackstone's real estate division, where realized performance revenue plunged 88% to $17.4 million. Fee-related earnings, including earnings from lucrative management and advisory fees, fell 5% to $1.12 billion.
During the quarter, Blackstone became the first private equity firm to join the benchmark S&P 500 index. It has a market capitalization of $125 billion and its total assets management remains above the $1 trillion mark.
Blackstone said its private equity portfolio rose 2.4%, compared with a 3.65% decline in the S&P 500 over the same period.
Infrastructure funds gained 11% and private credit funds appreciated by 4.6%. Opportunistic real estate funds dropped 2%.
Under generally accepted accounting principles (GAAP), Blackstone's net income surged to $552 million in the quarter, from $2.3 million a year earlier, owing to performance fees and investment income.
Blackstone raised $25.3 billion of new capital during the quarter, spent $12.4 billion on new acquisitions and retained $200.6 billion of unspent capital.
It declared a dividend of 80 cents per share.