Blackstone Profit Down On Big IPO Charge

Nov 12 2007 | 10:36am ET

The Blackstone Group swung to a third-quarter loss after taking a big charge relating to its initial public offering this summer.

Overall, revenue grew 14% to $526.7 million, as three of its four divisions enjoyed revenue spikes, but an $802.6 million non-cash charge—due to compensation costs from IPO unit awards, as well as amortization of intangibles—sent the private equity giant to a $113.2 million loss in the quarter. The company said it made a $372.5 million profit in the year-ago period, when it was still a private concern.

Blackstone also said the subprime mess contributed to the loss, as its real estate group saw revenue fall by almost half, to $109.1 million from $196.1 million. The firm said the credit crunch had spread to the general commercial real estate lending market.

“While it will be difficult to structure very large leveraged transactions in corporate private equity and real estate until the credit markets improve, pricing of assets is more favorable,” CEO Stephen Schwarzman, the beneficiary of more than $1 billion from IPO proceeds, said.

And indeed, all three of its other divisions—including corporate private equity—enjoyed big gains on the quarter. Corporate private equity revenue rose 42% to $227.3 million. Asset management revenue, which includes the firm’s hedge fund operations, soared 88% to $124.9 million. And its mergers and acquisitions advisory’s revenue rose 60% to $84.3 million.


In Depth

Israeli Hedge Fund Harnesses Big Data

Jul 28 2014 | 8:10am ET

Apica Green is a multi-million dollar Israeli hedge fund that is based in Tel Aviv...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note