Need proof that the private equity industry is in a bit of freefall? Just take a look at The Blackstone Group’s Q3 financials, which were released earlier this morning.
The firm reported a Q3 loss of $502.5 million, compared to a $299.2 million gain in Q3 of last year. This included -$68.3 million for its private equity portfolio, which was mostly attributed to a reduction in the carrying value of its portfolio companies. It also deployed about 35% less limited partner capital.
The only bright spot was from the firm’s financial advisory practice, which generated $160.7 million, which is a 120% increase over the $72.9 million from Q3 2007.
In a prepared statement, Blackstone chief Stephen Schwarzman said:
We are operating in a challenging and volatile environment. As evidenced in the third quarter, global equity and credit markets have declined substantially and we have lowered the carrying value of our fund investments. However, Blackstone has set up its businesses to not only weather such an environment, but to benefit from it. Given Blackstone’s strong balance sheet, scale and breadth of business and continued strong investment performance, we believe that the current market dislocations will alter the competitive landscape, position our firm to enhance our market position and enhance long term unitholder value.
Blackstone is holding a conference call at 9:30am, and Erin will be on the line. In the meantime, here is Blackstone’s 8-K filing: blackstone8-k.