Blackstone still beats earnings forecasts

BLACKSTONE GROUP, the largest manager of alternative assets such as private equity and real estate, on Thursday reported a 20 per cent drop in first-quarter earnings per share but still beat Wall Street’s expectations, as a stock market slump weighed on the value of its holdings.

Profits have soared at private equity firms such as Blackstone in recent years, as a US stock market rally allowed them to sell assets for top dollar. That rally came to an end in the first quarter, amid a trade dispute between the world’s two largest economies, the United States and China.

Blackstone posted economic net income per share of 65 cents in the first quarter, down from 81 cents a year earlier. Analysts, on average, expected 45 cents.

Economic net income, a closely watched earnings metric for US private equity firms, reflects the mark-to-market valuation of gains or losses on Blackstone’s portfolio.

New York-based Blackstone also said it plans to pay a 30 cent special dividend in 2018, returning to shareholders a portion of the proceeds from the conclusion of its partnership with FS Investment Corp. The firm increased its share buyback authorisation to $1bn (£704.72m) from $335.8m.

Stock market swings affect private equity firms because they often have large public market holdings in investments that they are the process of exiting.