Blackstone Group, the world’s largest alternative wealth manager, saw its second-quarter distributable income jump 86% on strong asset sales on Thursday, even though most of its funds have lost value during the market downturn.
Blackstone completed a number of asset sales during the quarter, primarily real estate, including the $5.65 billion divestiture of luxury hotel and casino The Cosmopolitan of Las Vegas and the $21 billion recapitalization of Mileway, the largest city hotel operator Euro ($23.81 billion). European warehouse.
Some of those deals were signed before Russia’s invasion of Ukraine in February, followed by a central bank rate hike that sent markets into a downward spiral. The divestiture completed in the second quarter, allowing Blackstone to post a lucrative performance charge.
Distributable earnings — which represent cash available to pay dividends to shareholders — rose to $2 billion in the three months ended June 30 from $1.1 billion a year earlier. That beat analysts’ median estimate of $1.03 billion, according to financial data provider Refinitiv.
Blackstone Group said its private equity portfolio fell 6.7% in the quarter, while its speculative real estate fund fell 1%. Funds managed by its hedge fund unit were flat at 0.6%. In contrast, the benchmark S&P 500 fell 16.5% over the period.
Lower company valuations have Blackstone looking for bargains. The company spent $48 billion on new acquisitions, including several real estate income trusts — American Campus Communities Inc and Preferred Apartment Communities Inc. It also agreed to make $6.3 billion for Crown Resorts, Australia’s largest casino operator.
On a GAAP basis, Blackstone reported a net loss of $29.4 million, compared with a net income of $1.3 billion a year ago. That’s because the metric takes into account sharp declines in corporate fund valuations.
Assets under management reached a record $940.8 billion, up 3% from the previous quarter’s $915 billion, driven by strong fundraising.
Unissued capital rose to a record $170.1 billion from $139.3 billion three months earlier. Blackstone declared a quarterly dividend of $1.27 per share, up from 70 cents a year ago.