Buyout firm Blackstone Group LP (BX.N) on Thursday reported quarterly earnings that grew but was a touch lower than expected, as strong gains in real estate holdings were eroded by a pullback in credit investment performance.
Blackstone earned an economic net income (ENI) of $705 million in the second quarter, or 59 cents a share, up 36 percent from a year ago, but below the 62 cents a share forecast of analysts, according to Thomson Reuters I/B/E/S.
ENI is a key metric for U.S. private equity that accounts for unrealized investment gains or losses.
Distributable earnings, or actual cash available for paying dividends, climbed 58 percent to $781.4 million from a year ago. That, in turn, translated to 63 cents a share.
In terms of performance, Blackstone’s real estate arm, which made up 28 percent of its total business, stood out as the firm sold property investments such as European warehouse firm Logicor for $14 billion in the quarter.
Performance fees in the real estate business jumped 155 percent to $494.1 million while investment income leapt 236 percent to $37.1 million.
Credit investments had a less stellar quarter after a drop in commodity prices dragged on energy holdings. As a result, performance fees slumped 68 percent to $35 million between April and June compared to a year earlier.
Led by co-founder Stephen Schwarzman, who is an economic adviser to U.S. President Donald Trump, New York-based Blackstone is the largest of U.S. buyout firms and managed $371 billion as of the end of the second quarter.