Buffeted by market turbulence in August and September, the New York investment giant said it lost $341.9 million in the three months ended Sept. 30, a sharp turnaround from a year-earlier $339.3 million profit.
Revenues, which, similar to earnings, reflect hypothetical performance fees on investments Blackstone hasn't yet exited, were a negative $124.1 million, versus positive $784 million in the third quarter last year.
On a generally accepted accounting principles basis, Blackstone's net loss widened to $274.6 million, or 56 cents per unit, from a year-earlier loss of $44.4 million.
Blackstone's stock traded up 2.5% midday Thursday, Oct. 20, to $13.57 in the wake of the earnings announcement.
The summer sell-off touched all of Blackstone's core operations. Its private equity holdings tumbled 10.9% in value, while hedge fund returns were -4.1%.
The mammoth real estate unit, long a stellar performer, reported negative $15.2 million in revenue amid a 0.1% increase in the carrying value of its holdings.
Still, there were bright spots amid the murk.
The companies in Blackstone's private equity stable recorded a 12% year-on-year boost in revenue and a 10% rise in Ebitda. And despite a seize-up in initial public offerings along with anemic debt markets that made it tough to exit deals, Blackstone gleaned $2.2 billion in gross proceeds during the quarter selling PE assets, at an average return to investors of 2.3 times costs.
The firm's total managed assets stood at $157.7 billion, about $1 billion less than at the end of June but 32% more than a year ago.
The market's gyrations had one positive effect in making assets more affordable, according to Blackstone president and COO Tony James.
"In terms of new investing, it was great for some of our investments," said James, who earlier this year said values were quite pricey, in a Thursday conference call.
"It was great for real estate area, great for our mezzanine and rescue-financing area. And in private equity -- ironically, with all the problems in Europe -- it's opened up the opportunity to make a number of interesting European investments."
He was less enthusiastic about the near-term outlook for the economy and the markets: "Our general economic view is stagnation. Not falling apart, but certainly not much in the way for growth."
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