Blackstone Group on Thursday said fee-earning assets under management rose 8% in the second quarter to $101.4 billion, driven by a 17% gain in the credit and marketable alternatives business, which houses Blackstone’s hedge funds-of-funds business.
Fee-related earnings in that unit, Blackstone’s largest by AUM, rose 37% to $34.6 million as management fees increased, the firm said Thursday in a statement.
Overall net fee-related earnings from Blackstone operations rose 24% to $107.9 million. The firm declared a quarterly dividend of 10 cents a share.
Blackstone’s total second-quarter earnings rose 13% as the value of real estate holdings and private equity investments gained.
Profit, excluding some costs tied to the firm’s 2007 IPO, increased to $205.2 million, or 18 cents a share, from $180.8 million, or 16 cents, a year earlier. Earnings beat the 16-cent average estimate of nine analysts in a Bloomberg survey.
The firm’s private equity holdings gained 3% as the firm benefited from stabilizing real estate and buyout markets that allowed it to mark up and sell assets. Blackstone raised a new buyout fund totaling $13.5 billion, President Tony James said on a conference call.
“We continue to see signs of improvement in the fundamentals across our portfolio,” Blackstone Chairman Stephen Schwarzman said in the statement.
The second-quarter net loss widened to $193.3 million from $164.3 million a year earlier. The firm had $24 million in negative unrealized performance fees in its private equity business in the quarter, compared with a positive $97.2 million a year earlier.
“Adverse global securities markets performance had a negative impact on performance fees in the second quarter,” Mr. Schwarzman said.