The coronavirus market meltdown has slapped US investment management giant Blackstone with a US$1.07 billion ($1.6 billion) net loss for the first quarter of the year.
The result, coming to a loss of US$1.58 ($2.48) a share, was a dramatic change from its profit of US$481.3 million net profit the year before.
Blackstone’s investment generated a total loss of US$4.1 billion, despite fee-related earnings of US$468 million ($757.4 million) being up by 25 per cent year-on-year.
The group’s total assets under management (AUM) had increased, up by 5 per cent year-on-year to US$538 billion ($846.6 billion).
But net accrued performance revenues totalled at US$2.1 billion ($3.3 billion), near half of what it had been in the prior quarter (US$4 billion or $6.2 billion) and the year before (US$3.8 billion or $5.9 billion).
Chairman and chief executive Stephen Schwarzman said the results reflected the “unprecedented market and global economic conditions caused by the COVID-19 pandemic”.
“Throughout our firm’s 35-year history, we have weathered many difficult periods – including the global financial crisis – only to emerge stronger than before,” Mr Schwarzman said.
“Our experience has shown that although asset values may be temporarily marked down, strong assets ultimately recover.”
Blackstone had seen inflows of US$27.3 billion ($42.9 billion) for the quarter. Fee-earning AUM was up by 20 per cent to US$423 billion ($679.7 billion), with US$50.8 billion ($79.9 billion) of inflows during the quarter.
Across segments, the private equity division saw its revenues drop by 10 per cent year-on-year to $388.5 million ($611.3 million), with its distributable earnings falling by 24 per cent to US$182.5 million ($287.1 million).
Fee-related earnings had increased by 4 per cent to US$114.8 million ($180.6 million) and total AUM was up 10 per cent to US$174.6 billion ($274.6 billion).
Meanwhile total AUM for hedge fund solutions decreased by 8 per cent to US$73.7 billion ($115.9 billion), while its revenue stayed stagnant at $141.5 million ($222.6 million).
The real estate division increased its AUM by 15 per cent to US$160.9 billion ($253.1 billion) for the quarter and revenue was up by 21 per cent to US$441.6 million ($694.8 million).
Its fee-related earnings soared by 68 per cent year-on-year to US$229.9 million ($361.8 million), while distributable earnings were up by 47 per cent to US$267.5 million ($421 million).
The credit and insurance business saw a 3 per cent slip in AUM, to US$128.6 billion ($202.4 billion), while revenue rose by 10 per cent to $168.7 million ($265.5 million).
The board declared a dividend of US$0.39 (61 cents), to be paid to shareholders on 11 May.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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