Blackstone Group LP (BX.N), the world’s biggest alternative asset manager, posted better-than-expected fourth-quarter earnings on Thursday as its investments rose across the board, in line with gains in the stock market.
The firm said it earned an economic net income – a key earnings metric for U.S. private equity firms that accounts for unrealized investment gains or losses – of $811.6 million after taxes between October and December, up 86 percent from $435.7 million a year earlier.
That translated to an economic net income of 68 cents per share. Analysts had expected Blackstone to post earnings of 64 cents, according to Thomson Reuters I/B/E/S.
However, distributable earnings, which shows cash that is available to pay dividends, was down by about a fifth at $691.8 million compared with a year ago.
The New York-based firm said private equity investments, which account for about a quarter of the $366.6 billion that it manages, appreciated 10.7 percent in 2016, roughly in line with a 9.5 percent gain in the S&P 500 stock index .SPX.
The firm’s real estate business, the biggest and most lucrative of all its units, posted gains of 11.1 percent in 2016, as economic income more than doubled to $395.4 million in the fourth quarter.
Returns in credit investments enjoyed the steepest gains for the year, climbing between 18 percent and 23 percent, helped by appreciation in energy holdings.
Hedge funds, which had a troubled year, reported gains of 3.5 percent for the year.
Indeed, Blackstone confirmed last month that it had started winding down its “big bet” hedge fund Senfina Advisors LLC after it faced mounting double-digit losses on its investments in 2016.
The biggest among U.S. private equity firms by the amount of cash it manages, Blackstone’s roughly $100 billion real estate arm is the largest of its kind in the business and helps to differentiate it from its peers.