Blackstone Inc, the biggest manager of assets such as private equity and real estate, said on Thursday its first-quarter distributable earnings fell 36% year-on-year, as a weak property market stopped it from cashing out on some holdings.
Blackstone has been grappling with redemptions at its flagship real estate income trust (BREIT), prompting it to exercise its right to block investor withdrawals at 5% of the quarterly net asset value of the fund every month since November.
The slowdown in commercial real estate — triggered by higher interest rates, fears about an economic slowdown and businesses consolidating office space in the aftermath of the COVID-19 pandemic — has also prevented Blackstone from selling assets for top dollar in many of its real estate funds.
Distributable earnings, which represent the cash used for shareholder dividends, fell to $1.25 billion in the first quarter from $1.94 billion a year earlier, Blackstone said. That translated to distributable earnings per share of 97 cents, slightly over the average analyst estimate of 96 cents, according to financial data provider Refinitiv.
Blackstone's fee-related earnings fell 9% to $1.04 billion, as fewer asset sales led to lower performance fees.
Blackstone's opportunistic and core real estate funds depreciated by 0.4% and 1.6% over the first quarter, respectively. Corporate private equity and private credit funds gained 2.8% and 3.4%, respectively.
Blackstone ended the first quarter with $991.3 billion in total assets under management, up 8% year-over-year. It had set a target of reaching $1 trillion in assets by the end of 2022, an ambition it had brought forward from 2026.
Under generally accepted accounting principles, Blackstone reported net income of just $211 million, down from $2.5 billion in the prior year, owing to the drop in asset sales as well as a decline in the value of its assets.