Market rally fuels strong 2Q gains for Blackstone

Blackstone 2nd-qtr economic net income more than triples on higher fees and fund performance

Associated Press

NEW YORK (AP) -- Private equity firm The Blackstone Group L.P. on Thursday said its second-quarter profit more than tripled as the market rally and increased buyout activity fueled fund performance and generated a sharp jump in fees. The results beat Wall Street expectations, and shares rose in morning trading.

The New York-based company reported net income of $211.1 million in the second quarter, or 36 cents per share. That's up from a loss of $75 million, or 14 cents per share, it reported during the same period a year ago.

An adjusted profit measure used by the private equity industry, known as economic net income, more than tripled to $703 million, or 62 cents per share, for the period. That was up from $212 million, or 19 cents per share, in the 2012 second quarter. Economic net income removes costs tied to the company's initial public offering and other charges.

Revenue more than doubled to $1.4 billion, from $627.2 million last year.

Analysts, on average, expected earnings of 49 cents per share and revenue of $1.1 billion.

Performance fees increased more than fivefold to $717 million from $135.4 million last year.

The company's total assets under management increased 21 percent to $229.6 billion from $190.3 billion, reflecting a combination of a strong flow of new money invested by clients and value appreciation due to broad market gains.

Also Thursday, Blackstone's Brixmor Property Group Inc. filed for an initial public offering. Brixmor, which owns neighborhood shopping centers, said it plans to raise $100 million. The real estate investment trust didn't said that the amount of shares that will be sold and their price range haven't been determined. Brixmor plans to list its stock on the New York Stock Exchange under the ticker symbol "BRX."

Among Blackstone's major deals during the quarter was an IPO of theme park operator SeaWorld Entertainment Inc., in April and the sale of a minority stake in mall operator General Growth Properties Inc. It also announced plans to buy Strategic Partners, the private equity business of Switzerland's Credit Suisse, for an undisclosed amount.

Blackstone's shares rose $1.07, or 4.9 percent, to $23.03 in midday trading Thursday.

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