It’s hard for private equity companies to make money when they aren’t making deals, and the deals they have made aren’t working out. Such is the situation of the Blackstone Group, which announced a $251 million first-quarter loss.
The firm, which announced just one leveraged buyout worth $1.2 billion in the first quarter, said the loss—excluding almost $200 million in costs related to its initial public offering last June; the firm expects to post losses for the next five years on IPO expenses—totaled $66.5 million, or 6 cents per share. Analysts were expecting it to turn a profit of about 12 cents per share, according to Bloomberg News.
In the year-earlier period, the p.e. giant turned an $838.5 million profit on deals worth $42 billion.
Blackstone’s flagship p.e. business was hit the hardest in the first quarter, making a $166.7 million loss, compared to revenue of $208.9 million in the first quarter of 2007. The firm blamed the anemic buyout market and mark-downs of the value of some of its portfolio companies for the ugly numbers.
The firm’s other business units were in the black, barely. Real-estate revenue plummeted 94% to $47.9 million, while hedge fund revenue fell 81% to $31 million.