July 23, 2020 / 12:22 PM / in 15 days

Blackstone second-quarter distributable earnings drop as asset sales slow

FILE PHOTO: Blackstone Group CEO and Co-Founder Steve Schwarzman speaks at a Reuters Newsmaker event in New York, U.S., November 6, 2019. REUTERS/Gary He/File Photo

(Reuters) - Blackstone Group Inc, the world’s largest alternative asset manager, said on Thursday its distributable earnings fell 23% year-on-year in the second quarter, as the coronavirus outbreak put off potential acquisition of some of its assets.

Blackstone said distributable earnings, which includes cash it generates by selling assets, fell to $548 million from $709 million a year earlier. This translated into distributable earnings per share of 43 cents, matching analysts’ consensus estimate, according to data compiled by Refinitiv.

Distributable earnings is a metric that Blackstone and other private equity firms focus on to describe their business. Using generally accepted accounting principles, Blackstone reported an 86% rise in net income to $568.3 million, as a rally in the markets in the second quarter, driven by central bank intervention and government stimulus, boosted the value of its assets.

The buyout firm said its private equity portfolio grew 12.8% in the second quarter, compared with a 20% in rise in the benchmark S&P 500 stock index over the same period. Opportunistic and core real estate funds appreciated by 1.6% and 3% respectively during the quarter.

“It was a strong quarter for our firm despite the continued market volatility. We are very well positioned to navigate the road ahead with our long-term committed capital model and an industry-record $156 billion of dry powder,” Blackstone Chief Executive Steve Schwarzman said in a statement, referring to unspent capital.

Total assets under management, that include real estate, private equity corporate credit and investments in hedge funds, rose to $564.3 billion from $538 billion reported in March, supported by strong fundraising. Many of these assets generated management fees that boosted Blackstone’s fee-related earnings by 28% year-on-year to $541 million.

Blackstone declared a quarterly dividend of 37 cents per share.

Reporting by Chibuike Oguh in New York; Editing by Bernadette Baum

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