Blackstone’s earnings soar as slump ends

City A.M. Reporter
PRIVATE equity firm Blackstone Group yesterday posted quarterly earnings that beat market forecasts, and said the value of its private equity and real estate portfolios rose, although the amount invested in new deals was steady.

The firm, which has investments in companies including Hilton Hotels and casino operator Harrah’s Entertainment, said third-quarter economic net income, or ENI, rose to $339m from $275m (£212.7m) a year earlier.

The value of the firm’s private equity investments rose six per cent over the previous quarter and its real estate funds rose 19 per cent, Blackstone said.

The amount of capital invested by the funds was little changed over the previous year, chief operating officer Tony James said on a conference call.

While financing conditions have rebounded, making it easier to strike large leveraged buyouts, valuations are still too high in some cases, he said.

“It’s much harder to find things of attractive value,” James said. “There are some good companies being sold, but we just can’t get to the prices that are required.”

Money is instead being invested in “very high proprietary content,” James said, referring to deals that are created by Blackstone rather than bidding in auctions.