Blackstone profit falls 41% on plunge in asset sales

Blackstone Inc said Thursday that its distributable earnings from fourth trimester they fell 41% year-on-year as the world’s biggest alternative asset manager sold fewer investments in its top portfolios.

Distributable earnings, which represent cash used to pay dividends to shareholders, fell to $1.3 billion from $2.3 billion a year earlier. This translated into distributable earnings per share of $1.07, which beat analysts’ median estimate of 95 cents, according to financial data provider Refinitiv.

The increase in interest ratesthe inflationthe fears of a recession and geopolitical tensions stemming from the Russia-Ukraine conflict have prevented venture capital firms like Blackstone from selling assets at a higher price.

Blackstone stated that its net proceeds from asset sales fell sharply 55%, to $366.9 million, in the fourth quarter through December, from $817.5 million a year earlier.

Fee-related earnings fell 39% to $1.1 billion. The company has faced rising redemptions on its main real estate investment trust (BREIT), which contributes 17% to its profits.

The turbulence in the financial markets also weighed on the quarterly results of the Blackstone funds.

Its opportunistic and basic real estate funds fell 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. Instead, the benchmark S&P 500 it rose 7.08% in the fourth quarter.

Under generally accepted accounting principles, Blackstone had net income of $557.9 million, down 60% from $1.4 billion a year earlier, due to investment losses.

Blackstone generated net income earned from performance 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.