Blackstone profits fall 70% in Q4

Miami /
Jan.January 28, 2016 04:30 PM

From the New York websiteThe Blackstone Group saw its profits shrink by 70 percent in the fourth quarter amid weak stock markets. The alternative asset manager, whose real estate funds collectively were the biggest investor in New York City real estate in 2015, also took a hit on its stake in the Hilton hotel chain.

Blackstone’s economic net income fell from $1.45 billion to $435.7 million, or from 44 cents to 37 cents a share. Analysts had expected profits to stay flat at 44 cents per share.

Weak stock markets are partly to blame, as share prices influence the fund manager’s net economic income. Blackstone’s credit arm GSO Capital Partners, meanwhile, was hit hard by falling oil prices and saw its profits shrink by 87 percent. Blackstone’s stake in hotel company Hilton Worldwide Holdings has lost $2.3 billion in value since September.

“It’s really just noise,” Blackstone’s president Tony James said on an earnings call Thursday. “We do not believe the markdowns represent permanent diminution of values, impairments or changes in what we ultimately expect to realize from our investments.”

The Blackstone Group’s realized much of its income from fees it charges investors for managing its private equity, real estate, hedge and debt funds. Weaker performance of those funds translates into lower earnings. Blackstone’s funds have $336.4 billion in assets under management, making it the world’s largest alternative asset manager.

Blackstone’s real estate division, headed by Jonathan Gray, last year made a splash by buying New York’s Stuyvesant Town-Peter Cooper Village for $5.3 billion. The firm also dished out $23 billion for GE Capital’s real estate portfolio in partnership with Wells Fargo and $8 billion for BioMed Realty Trust.

In South Florida, the financial giant regularly trades in multifamily complexes and retail developments. The firm’s Invitation Homes division also operates 175 rental properties in the region.[Bloomberg]Konrad Putzier

 

Related Articles

arrow_forward_ios
David Martin and Russell Galbut with a rendering of 500 Alton Road
Miami Beach developers nab $345M construction loan for 500 Alton
Miami Beach developers nab $345M construction loan for 500 Alton
Blackstone’s Jon Gray and 2MiamiCentral (Getty, iStock)
Blackstone buys MiamiCentral office buildings for $230M
Blackstone buys MiamiCentral office buildings for $230M
Stephen Schwarzman with the site (Getty, Google Maps)
Blackstone pays $21M for Doral industrial dev site
Blackstone pays $21M for Doral industrial dev site
Blackstone's Jon Gray and 2MiamiCentral (Getty)
Blackstone inks lease at MiamiCentral in downtown Miami
Blackstone inks lease at MiamiCentral in downtown Miami
Blackstone's Jonathan Gray and Stephen Schwarzman (Getty, iStock)
Blackstone to open office in South Florida
Blackstone to open office in South Florida
Jon Gray, 16100 Northwest 49 Avenue and 16200 Northwest 49 Avenue, Miami Gardens (Credit: Google Maps)
Blackstone snags eight industrial properties in Miami-Dade
Blackstone snags eight industrial properties in Miami-Dade
Shlomo Khoudari, Managing Partner at Elion Partners, and Stephen A. Schwarzman, CEO of the Blackstone Group, with 1800-1880 North Commerce Parkway, Weston, and 3400-3450 Park Central Boulevard, Pompano Beach (Credit: Google Maps)
Blackstone pays $46M for Broward industrial properties
Blackstone pays $46M for Broward industrial properties
Shane Neman, and Mauricio Bello Richard Waserstein, with 525 Northwest 77th Street Marriott in Boca
Blackstone sells Marriott hotel in Boca Raton
Blackstone sells Marriott hotel in Boca Raton
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...