Blackstone 1Q profit nearly triples on market rise

Blackstone 1Q profit nearly triples as private equity firm gains from market rebound

Associated Press

NEW YORK (AP) -- Blackstone Group LP, a private equity firm, said Thursday that its first-quarter net income nearly tripled as a market rebound increased gains from its investments.

The New York posted profit of $167.6 million, or 29 cents per share from January through March, up from $58.3 million, or 11 cents per share, in the same months a year ago.

An adjusted profit measure favored by the private equity industry rose 28 percent to $628.3 million, or 55 cents per share. The profit measure, called economic net income, strips out charges tied to employee stock grants from Blackstone's 2007 initial public offering of stock. Analysts polled by FactSet predicted 53 cents per share.

Revenue rose 29 percent, to $1.26 billion from $974.1 million. Analysts expected $1.17 billion.

Blackstone's private equity business raises money from large investors such as pension funds and uses that money and debt financing to buy companies, often distressed public companies. It aims to profit by selling them later to investors in an IPO, or to other companies.

In the first quarter, Blackstone's Pinnacle Foods Inc., the maker of Birds Eye frozen foods, had an IPO, and Blackstone sold stock in companies it had already taken public.

The value of its investments also grew as stock markets climbed, and it pulled in more money from fees for managing those investments. The Standard & Poor's 500 index rose 10 percent in the first quarter.

The company's total assets under management increased 15 percent to $218 billion, as clients invested more money and the value of those investments grew.

Apart from its private equity business, Blackstone invests in real estate, hedge funds and credit. It also has a financial advisory arm.

Shares rose 30 cents, or 1.5 percent, to $20.73 in morning trading.

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