Blackstone Group reported a $93.6 million loss in the first quarter, compared to a profit, or what it called economic net income, of $957.8 million in the year-ago quarter. The loss was the result of a drop in the value of Blackstones holdings.
Revenues dropped to $32.3 million from $1.23 billion a year ago, with revenue declines in all four of Blackstones business segments: corporate private equity, real estate, marketable alternative asset management and financial advisory. Corporate private equity alone sustained a $116.7 million loss. However, assets under management grew 37% to $113.53 billion in the quarter from $83.14 billion in first quarter 2007. Blackstone did not provide comparison data for the previous quarter.
Leveraged buyout activity slowed to a crawl in the first quarter with only smaller deals getting loans because lenders severely restricted substantially limited new commitments to senior loans and high-yield debt, according to Blackstones earnings release. This was good and bad for the firm, Stephen A. Schwartzman, Blackstone chairman and CEO, stated in the release. Although holding or carrying values declined, purchase prices also declined and credit market dislocation has also created attractive debt investment opportunities, particularly in leveraged loans, Mr. Schwartzman said.