Blackstone 2Q earnings climb 243%
Private equity firm Blackstone Group (BX) posted record earnings Thursday, more than double the year earlier and at the highest since the company went public four years ago. Blackstone is so confident in the performance that it is creating a new fund for real estate investments. Net income for Blackstone in the second quarter is $703 million on revenue of $1.3 billion, which is more than double the year ago, according to its earnings report. This is up 243% from $205 million from the second quarter of 2010, and higher than the $567.8 million for the first quarter 2011. Blackstone said higher fees in the real estate and private equity segments, increased to $412.9 million and $211.5 million, respectively during the quarter and the company declared a quarterly distribution of 10 cents per common unit. "Despite the challenges presented by slowing global economic growth, overall our portfolio companies and real estate investments performed well in the second quarter," CEO Stephen Schwarzman said. "We experienced inflows across all of our businesses as we captured share and deepened relationships with our limited partner investors," he said. "We ended the quarter with record total assets under management of $159 billion, up from $111 billion during the same period last year." Blackstone said it holds more money in reserve for investing than ever before. And it is looking at ways to put that $31 billion to work, with $7.4 billion dedicated to real estate. In the second quarter, Blackstone commenced fund-raising for its next major real estate fund, BREP VII. The fund reached approximately 87% invested or committed capital as of the end of the second quarter. A material portion of the firm's revenue came from preferred return hurdle in funds. This is when an investment firm reaches a profit goal for a fund, it becomes entitled to a greater portion of the returns going forward. Total management fees increased 23% to $513.6 million from $417.5 million the prior year. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.