Blackstone Group LP rode a widespread market advance in the second quarter, earning 36 percent more than a year earlier. The results fell short of analysts’ estimates as a downturn in energy prices hit private equity holdings.
While the asset manager’s public holdings -- shares of companies it’s taken public -- tracked positively, private investments were “pressured by the underperformance in energy,” Credit Suisse Group AG analysts led by Craig Siegenthaler wrote in a note to clients before the results were announced. Energy was likely a “headwind,” Jefferies Group analysts led by Gerald O’Hara wrote.
Shares of New York-based Blackstone fell 0.8 percent to $34.50 in pre-market trading Thursday.
Economic net income, which reflects both realized and unrealized investment gains, was $705.4 million, or 59 cents a share, compared with $519.8 million a year earlier, Blackstone said in a statement. Analysts had expected earnings of 62 cents a share, the average of 13 estimates compiled by Bloomberg.
The firm’s real estate business, its largest by assets at $104 billion, led sales in the quarter. It sold off $4.6 billion of holdings, including shares of Hilton Worldwide Holdings Inc. and a string of Equity Office Properties assets.
Private equity, which oversees $100 billion, sold $2.8 billion in assets, including part of its holding in food-service distributor Performance Food Group Co. and its remaining stake in SeaWorld Entertainment Inc.
Infrastructure Push
While Blackstone continues to attract attention given Chief Executive Officer Steve Schwarzman’s close ties to the Trump administration, it also made significant announcements of its own in the quarter. Saudi Arabia’s Public Investment Fund agreed to anchor a $100 billion infrastructure ambition that the firm seeks to build out over the coming quarters.
Blackstone also celebrated its 10-year anniversary as a public company with the stock little changed from its initial listing price, continuing to fuel discussions over public-market valuations of alternative-asset managers.
On the personnel front, the firm promoted Dwight Scott to president of its credit unit, GSO Capital Partners, as Blackstone deepens its bench of leadership candidates. Succession in the industry continues to be a hot-button topic as founders age and firms begin clarifying plans for transitioning to the next generation.