Property gains fuel jump in profits at Blackstone Group
Real estate continues to fuel gains for Blackstone Group, which reported a jump in third-quarter profit that exceeded all analysts' estimates yesterday.
Economic net income, a measure of earnings that reflects both realised and unrealised investment gains, was $834.3m (€705m), or 69 cents a share, compared with $687m a year earlier, New York-based Blackstone said in a statement yesterday.
The private equity giant was a significant buyer of Irish assets after the crash, including taking the single biggest stake in Eir at one stage, and buying the €1.8bn Project Tower portfolio of loans from Nama that was made up of loans, property and development linked to Cork developer Michael O'Flynn's O'Flynn Group.
Under an agreement later struck with Michael O'Flynn, assets backed by the Tower loans were divided between the borrower and Blackstone.
The Elysian Tower in Cork, the tallest building in the Republic, is currently for sale by Blackstone with a price tag of around €100m. Last year Blackstone bought the Blanchardstown Shopping Centre in Dublin in a €950m deal.
Yesterday, Blackstone reported widespread gains across its business.
Blackstone's opportunistic real estate portfolio appreciated 5.5pc during the three months to the end of September 30, exceeding the 4pc rise in the S&P 500 index of large US companies.
Drivers included the firm's investments in Invitation Homes and Hilton Worldwide. Blackstone's credit funds also posted gains across performing and distressed debt strategies, as did the firm's hedge funds.
Shares of Blackstone, led by CEO Steve Schwarzman, rose 1.2pc to $33.89 as of 10:24am in New York as wider markets declined.
The stock has gained 33pc, including reinvested dividends, this year.
Blackstone's private equity portfolio gained by 3.3pc.
Part of the upside surprise came from strength in Blackstone's private buyout holdings, which more than offset a slide in the value of its public portfolio. (Additional reporting Bloomberg)