Blackstone third-quarter earnings drop less than expected

Blackstone, the world’s largest manager of alternative assets such as private equity and real estate, said on Wednesday its distributable earnings in the third quarter fell 8% year-on-year, but still beat analyst estimates.

Blackstone reported a drop in proceeds from asset sales in its private-equity business, offset partly by a rise in distributable earnings in its real estate, corporate credit, and hedge funds divisions.

Distributable earnings per share came in at 58 cents, higher than the 53 cents that analysts estimated on average, according to data compiled by Refinitiv.

The New York-based buyout firm said income per share on a diluted basis rose to $1.15, based on generally accepted accounting principles (GAAP), up 80% from a year ago.

Movements in stock prices of companies affect private equity firms because their private investments are valued using public markets as a yardstick. Buyout firms also have large public market assets, which they are looking to sell off at a profit.

Blackstone said its private equity portfolio appreciated 2.6% in the third quarter. Opportunistic and core real estate funds rose by 3.8% and 2.3% respectively.

The firm raised a record $26 billion for its flagship buyout fund during the quarter, as it benefited from a strong fundraising environment driven by institutional investors seeking higher returns amid low interest rates.

Total assets under management rose to a $554 billion in the three months to September, up 2% from $545.5 billion in the prior quarter.

Read Blackstone’s earnings release here.