Blackstone reports almost flat Q2 distributable earnings

Blackstone Group Inc, the world's largest manager of alternative assets such as private equity and real estate, said on Thursday its distributable earnings in the second quarter rose just 1% year-on-year, and missed analysts' expectations.

Higher earnings from the sale of assets in Blackstone's private equity, credit and fund-of-hedge-funds divisions was almost offset by a plunge in proceeds from divestments in its real estate unit.

The New York-based firm reported net income per share on a diluted basis of 45 cents, lower than analysts' expectations on average for 50 cents, according to Refinitiv data estimates.

Blackstone said its assets under management rose to a record $545.5 billion in the three months through June, from $511.8 billion in the prior quarter.

Distributable earnings, the cash available for paying dividends, came in at $708.9 million, compared to $700.1 million a year ago. Blackstone said it would pay a second-quarter distribution of 48 cents per share.

Blackstone said the value of its private equity portfolio appreciated by 0.7%, compared to a 3.8% rise in the benchmark S&P 500 stock index. Opportunistic funds and core real estate funds appreciated 4.4% and 0.8% in the quarter, respectively.

Stock market swings impact private equity firms because they often have large public market holdings in investments that they are in the process of exiting. Public markets are also used as a measuring stick when valuing private investments.

"These results reflect the enormous confidence our firm has earned with global investors through decades of delivering strong performance and innovation," Chairman and Chief Executive Steve Schwarzman said in a statement.

This was Blackstone's first earnings report since officially converting from a partnership to a corporation, a move designed to boost its share price.

Since making the announcement in April, Blackstone's stock has jumped by around 25%, outperforming the broader market.