Blackstone Profit Tumbles 12%
Blackstone Group Inc., one of the world’s largest asset managers, reported a 12% drop in third-quarter profit as interest rates and deal activity slumped.
The New York-based firm said its economic net income, a measure of profitability that takes into account the mark-to-market value of its investments, fell to $1.1 billion from $1.3 billion a year earlier.
Revenue Declines
Revenue declined to $2.2 billion from $2.3 billion a year earlier. Blackstone’s assets under management rose to $571 billion from $543 billion a year earlier.
The firm’s private-equity business, which invests in companies and takes them private, saw its economic net income drop to $400 million from $619 million a year earlier.
Interest Rates and Deal Activity
The decline was due to lower interest rates and a slump in deal activity. Blackstone’s real estate business, which invests in commercial and residential properties, saw its economic net income drop to $365 million from $521 million a year earlier.
The firm’s credit business, which invests in debt securities, saw its economic net income drop to $231 million from $294 million a year earlier.
Blackstone’s Performance
Blackstone’s performance was in line with other asset managers, which have seen their profits decline due to the low interest rate environment.
The firm’s stock has risen more than 20% this year, outperforming the S&P 500, which is up about 10%.
Blackstone’s CEO
Blackstone’s CEO, Stephen Schwarzman, said in a statement that the firm had “delivered strong results in a challenging environment.”
He added that the firm had “made significant progress on our strategic initiatives, including expanding our global presence, investing in new products and services, and continuing to diversify our revenue streams.”
Blackstone’s Outlook
Blackstone’s outlook for the rest of the year is uncertain. The firm said it expects the low interest rate environment to continue to weigh on its performance.
It also said it expects deal activity to remain subdued, as companies remain cautious in the face of economic uncertainty.
Blackstone’s Strategies
Blackstone has been focusing on expanding its global presence and investing in new products and services. The firm has also been diversifying its revenue streams, including investing in infrastructure and real estate.
The firm has also been investing in technology, including artificial intelligence and machine learning, to help it make better investment decisions.
Blackstone’s Growth
Despite the challenging environment, Blackstone has continued to grow. The firm said it has seen strong inflows into its funds, and its assets under management have grown.
The firm has also been expanding its presence in Asia, Europe, and Latin America.
Blackstone’s Outlook for the Future
Blackstone remains optimistic about the future. The firm said it is well-positioned to capitalize on opportunities in the markets, and it expects to continue to deliver strong returns for its investors.
The firm also said it is committed to investing in its people and technology to ensure it remains competitive in the future.
Blackstone is one of the world’s largest asset managers, and its performance in the face of a challenging environment is a testament to its strength and resilience. The firm is well-positioned to capitalize on opportunities in the markets, and it is committed to investing in its people and technology to ensure it remains competitive in the future.