* Total assets under management up 25 pct y/y to $272 bln as
* 1st qtr ENI per share of 70 cts vs 55 cts in Thomson
Reuters analyst poll
* 1st qtr distributable earnings at $485 mln, up 24 pct y/y
(Adds closing share price paragraph 2)
By Greg Roumeliotis
NEW YORK, April 17 Blackstone Group LP,
the world's largest alternative asset manager, reported a 30
percent increase in first-quarter earnings on strong gains in
its private equity arm which more than offset small declines in
its real estate unit.
The results, buoyed by asset sales and a strong appreciation
in Blackstone's buyout funds that outpaced the wider stock
market, beat most analysts' expectations. Blackstone's shares
closed 1.3 percent higher at $31.34 on Thursday after rising as
much as 3.4 percent earlier in the session.
Blackstone said economic net income (ENI), a measure of
profitability that takes into account the mark-to-market
valuation of its portfolio, was $813.9 million in the first
quarter versus $628.3 million a year ago.
That translated into ENI per share of 70 cents, more than
the 55 cents that analysts forecast on average in a Thomson
"The beat was driven by a combination of both realized and
unrealized performance fee strength across platforms, as well as
lower than forecast comp and taxes," Jefferies LLC analysts
wrote in a research note.
On an earnings call with analysts, Blackstone Chief
Executive and co-founder Stephen Schwarzman said the private
equity and real estate divisions generated in the first quarter
a combined multiple of 3.4 times the firm's invested capital.
"Investors give us money so that they can make money, and an
example of 3.4 times across two of our biggest asset classes for
investments sold in this period gives you a sense of why the
alternative investing area is a great one and is going to
continue to grow," Schwarzman said.
Private equity was Blackstone's star performer in the
quarter. Its buyout funds fired on all cylinders, appreciating
by 7 percent in the quarter, while realized and unrealized
performance fees soared by 413 percent.
By contrast, the firm's real estate portfolio appreciated by
3.8 percent and its realized and unrealized performance fees
fell 5 percent.
The realized performance fees in real estate, however, rose
171 percent to $195 million, as Blackstone continued to cash out
on its global office portfolio, including the Broadgate Estate,
Equity Office Properties, CarrAmerica and Trizec assets.
In Blackstone's credit investment arm, ENI was down 18
percent, as performance fees dropped 22 percent. Blackstone's
unit that invests in hedge funds reported a 21 percent increase
REAL ESTATE FUNDRAISING
Distributable earnings, which show actual cash that is
available to pay dividends, rose 24 percent in the first quarter
to $485 million.
Total assets under management reached a record $272 billion
as of the end of March, up 25 percent from a year ago.
Fee-earning assets under management rose 19 percent to $203.6
Schwarzman said fundraising for Blackstone's first Asia real
estate fund was going well, with $3.5 billion raised so far and
the fund expecting to hit its cap of $5 billion. Blackstone is
also developing a "core-plus" strategy in real estate, which so
far comprises four separate accounts with investors, he added.
Blackstone has also raised $5.6 billion for its tactical
opportunities pool, a multi-asset strategy that pursues
investments outside the scope of the firm's private equity, real
estate, hedge fund and credit units.
Strategic Partners, an asset manager that buys private
equity fund investments in the secondary market and which
Blackstone acquired from Credit Suisse Group AG last
year, has raised $1.5 billion so far for its new fund and is on
track to meet its fundraising target of more than $3 billion,
Blackstone said it had returned $11.5 billion of capital to
its fund investors during the first quarter. It also invested or
committed $7.4 billion of capital in the quarter.
Blackstone declared a quarterly distribution of 35 cents per
Blackstone shares were up 1.6 percent at $31.42 on the New
York Stock Exchange on Thursday afternoon, off an earlier high
(Editing by Franklin Paul, Paul Simao and Matthew Lewis)