Blackstone's earnings fall 41% as assets sales slump

Blackstone Inc said on Thursday its fourth quarter distributable earnings fell 41% year-on-year as the world's largest manager of alternative assets cashed out fewer investments across its key portfolios.

Distributable earnings, which represents the cash used to pay dividends to shareholders, fell to $1.3 billion from $2.3 billion a year earlier. That translated to distributable earnings per share of $1.07, which surpassed the average analyst estimate of 95 cents, according to financial data provider Refinitiv.

Higher interest rates, inflation, recession worries, and geopolitical tensions from the Russia-Ukraine conflict have prevented private equity firms like Blackstone from selling assets for top dollar.

Blackstone said its net profit from asset sales fell sharply by 55% to $366.9 million during the fourth quarter to December, down from $817.5 million a year earlier.

Blackstone's closely watched fee-related earnings fell 39% to $1.1 billion. The firm has faced rising redemptions at its flagship real estate income trust (BREIT), which contributes about 17% to its earnings.

Financial market turbulence also weighed on the quarterly performance of Blackstone's funds.

Its opportunistic and core real estate funds depreciated by 2% and 1.5%, respectively. Secondary funds fell 1.8% while corporate private equity and private credit funds gained 3.8% and 2.4%, respectively. By contrast, the benchmark S&P 500 index rose 7.08% in the fourth quarter.

Under generally accepted accounting principles, Blackstone reported net income of $557.9 million, down 60% from $1.4 billion in the prior year owing to investment losses.

Blackstone generated net accrued performance revenues of $6.8 billion, spent $18.7 billion on new acquisitions, raised $43.1 billion of new capital, and retained $186.6 billion of unspent capital. It ended the quarter with $974.7 billion of total assets under management and declared a quarterly dividend of 91 cents per share.