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Blackstone 4Q bogged down by real estate, private equity

Investment firm Blackstone‘s (BX) fourth-quarter loss widened to $123 million from $11 million a year prior, due in part to reduced revenue from its private equity and real estate holdings.

The measure, on a generally accepted accounting principles basis, equates to a 25-cents-a-share loss compared with a 3-cents-a share loss in fourth quarter 2010.

Using a gauge Blackstone calls economic net income, which subtracts costs from its initial public offering in 2007, the firm saw its income dip to $449.9 million, or 40 cents a share, from $512.7 million a year earlier. That matched analysts’ consensus.

On the year, Blackstone recorded a GAAP loss of $269 million from a $370 million loss in 2010, or a 57-cents-a-share loss from a loss of $1.02 a share.

Co-founder Stephen Schwarzman said Blackstone had a strong performance in 2011, despite “volatile markets and struggling economies.”

“Our investors view us as a critical partner, helping them protect and grow their capital,” Schwarzman, also chairman and CEO, said in a release. “During 2011, we invested or committed over $16 billion from our drawdown funds, which we believe will yield attractive results for our investors as well as provide capital that is critical to spurring economic growth, supporting job creation and restoring confidence in our nation’s future. We also distributed approximately $9 billion to our drawdown fund investors during the year.”

Blackstone’s real estate business drew less revenue in the fourth quarter at $392.4 million, down $24.8 million from a year earlier. The firm attributed the reduction to declines in investment income and transaction and other fees.

Its economic net income measure for real estate declined to $250.8 million from $280.8 million in the year-earlier quarter. 

The firm’s real estate portfolio turned out a sunnier full-year performance, bringing in $1.6 billion in revenue from $1 billion in 2010. Economic net income rose as well to $1 billion from $639.5 million, and fee-earning assets under management climbed to $31.2 billion from $26.8 billion.

Blackstone’s private equity division brought in revenues of $578.8 million in 2011, reduced significantly from $828.4 million the prior year.

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