Blackstone Loses $500 Million In Q3

Nov 6 2008 | 11:43am ET

The Blackstone Group posted a half-billion dollar loss in the third quarter, battered by the market turmoil.

The private equity giant said its net economic loss after taxes was $502.5 million. According to generally-accepted accounting principles, the loss was $365.5 million. In addition, the firm’s business lines saw $160.3 million in negative revenues.

“We are operating in a challenging and volatile environment,” Stephen Schwarzman, chairman and CEO, said. “As evidenced in the third quarter, global equity and credit markets have declined substantially and we have lowered the carrying value of our fund investments.”

Blackstone’s private equity business lost $68.3 million during the quarter, compared to a $227.3 million in revenue, while its real-estate business lost $273.7 million. Still, Blackstone pointed to a strong balance sheet featuring $1.13 billion in available cash and another $1.29 billion in liquid funds.

The firm’s hedge fund unit posted $48 million in negative revenue in spite of higher assets under management and management fees. Meanwhile, Blackstone’s advisory business—which included active deal advisory and restructuring business during boom times for those services—almost doubled its revenue, earning $160.7 million.

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