Blackstone Group LP reported a sharp jump in second-quarter profit as the value of its private-equity portfolio surged.
Net income for the quarter rose to $742 million, or $1.09 a share, from $337.4 million, or 50 cents a share, a year earlier.
The value of Blackstone’s private-equity portfolio climbed by 9.5% in the quarter, accelerating over the 6.4% growth it posted in the first quarter, as the value of its public holdings climbed and it marked up private holdings based on announced sales. The S&P 500 climbed 2.9% in the second quarter, despite worries about trades tensions, as technology stocks overcame their first-quarter slump.
The investment firm’s economic profit, which reflects changes in the value of unrealized investments, rose to $1.08 billion, or 90 cents a share, from $695.7 million, or 58 cents a share, a year earlier. The figure exceeded the 74 cents consensus estimate of analysts polled by FactSet.
Blackstone said assets under management were $439.4 billion, an increase over the previous year but a drop from the prior quarter, reflecting the end of its credit business’s relationship with FS Investments. The firm said in April it would use the proceeds from that divestiture to pay a special dividend of 30 cents a share, distributed over three quarters.
Blackstone said it paid that a 10 cents special dividend and repurchased 2.2 million of its shares during the second quarter as part of a previously announced buyback.
During the second quarter, Blackstone sold out of the last of its remaining stake in Hilton Worldwide Holdings Inc., closing out the most profitable private-equity investment in real estate ever. The firm also sold three U.K. office properties, leading to $4.3 billion of real-estate realizations in the quarter.
Blackstone’s second-quarter distributable earnings, the share of profits that could be returned to shareholders, fell to $700.1 million, or 56 cents a share, from $781.4 million, or 63 cents a share, a year earlier. Blackstone said it would pay a 58 cent dividend for the quarter, compared with 54 cents for the year-earlier quarter.
Shares of Blackstone edged down 0.6% in recent premarket trading.
Write to Miriam Gottfried at Miriam.Gottfried@wsj.com
Source : MTV