Blackstone Inc., the world’s largest alternative-asset manager, cashed out of big deals in the second quarter, mitigating the sting from writedowns on investments and the tumult rippling through markets.
Q2 2022 hedge fund letters, conferences and more
Second-quarter distributable earnings surged 86% from a year earlier to $2 billion, or $1.49 a share, after the firm took profits from large investments, Blackstone said Thursday in a statement. That exceeded the average estimate of $1.47.
Writedowns on holdings, including those tied to the technology and industrials sectors, contributed to a net loss of $29.4 million. Blackstone’s corporate private equity depreciated by 6.7% in the quarter. Credit bets were also in the red, with liquid credit down 5.5% as leveraged-loan markets sold off.
Blackstone shares fell 3.4% in pre-market trading Thursday. The stock has slid 22% this year through Wednesday, compared with the S&P 500’s 17% fall.
Blackstone President Jon Gray said he sees a challenge ahead amid Federal Reserve interest-rate increases, and as it gets harder for companies to go public and for buyout firms to dispose of bets at big profits.
“No one is unscathed in this environment,” Gray said in an interview. “The Fed tightening is going to lead to an economic slowdown.” It will take time for the Fed to cool inflation, he said. “It’s a little bit like a train that’s got a lot of momentum and a conductor has got to pull back.”
Blackstone is the first of the biggest alternative-asset managers to report second-quarter earnings. The firm invests in real estate, company take-private deals and fast-growing startups, and is a source of financing to businesses. With $940.8 billion in assets under management, it is a force in the world beyond stocks and bonds and a barometer of the health of the industry.
Read the full article here by Dawn Lim, Advisor Perspectives.
