The Blackstone Group swung to a fourth-quarter profit as its portfolio companies rose in value and the deal-making environment improved.
The private equity giant saw a swing of nearly $1 billion from the year-earlier period. Blackstone posted a $329.4 million profit in the last three months of 2009; in the fourth quarter of 2008, the firm took a loss of $763.8 million.
The New York-based firm easily topped analysts’ estimates. Its private equity business took in $177.8 million in profit, up from a $239.1 million loss. Blackstone’s fund of hedge funds and advisory business, which the firm has aggressively expanded, also increased its profits, while its real-estate business cut its loss.
“Overall, the economy and business environment is improving, and we saw that across the board in our results,” Blackstone President Tony James said.
The value of the firm’s private equity holdings rose 7% in the fourth quarter, as Blackstone has restructured some $26 billion in debt of its portfolio companies. The firm plans to sell some of those companies in the coming year.
“There’s been a sharp pick-up in realizations,” James said. “They won’t all get done, but there’s a lot of activity and it’s the first time in 18 months that’s been true.”