The Blackstone Group says adverse global market and economic conditions led to lower revenues and a loss for the fourth quarter and full year 2008.
The Blackstone Group says adverse global market and economic conditions led to lower revenues and a loss for the fourth quarter and full year 2008.
For the full year 2008, total reportable segment revenues were a negative USD(442.1)m as compared to total pro forma adjusted reportable segment revenues of USD3.12bn in 2007.
The Blackstone Group says lower fair values of portfolio investments across the corporate private equity, real estate and marketable alternative asset management segments contributed to the negative revenues.
This was partially offset by strong results in its financial advisory businesses and strong growth in management fees from fee paying assets under management.
For the fourth quarter 2008, total reportable segment revenues were negative USD(621.4)m as compared to negative USD(229.2)m for the third quarter 2008 and USD366.9m for the fourth quarter 2007.
Financial advisory achieved record revenue of USD411m, a 12 per cent increase from the full year 2007.
Fee-earning assets under management of USD91bn at 31 December 2008 increased nine per cent over year end 2007.
Blackstone’s real estate funds, funds of hedge funds and GSO credit-oriented funds all experienced net inflows during 2008.
Neither Blackstone’s chairman, chief executive officer and co-founder, Stephen A. Schwarzman, nor its co-founder, Peter G. Peterson, received any bonuses in 2008.
Economic net income was a loss of USD(1.33)bn for the full year 2008 as compared to pro forma adjusted economic net income of USD2.12bn for the full year 2007.
Adjusted cash flow from operations for the full year 2008 was USD128.8m as compared to pro forma adjusted cash flow from operations of USD1.52bn for the full year 2007.
Blackstone says it remains well positioned from a capital and liquidity perspective, with USD503.7m in available cash as of 31 December 2008 and USD767.6m in cash as of 31 January 2009 after paying off the entire USD250m balance on its revolving credit facility.
GAAP results for the full year 2008 included negative revenues of USD(349.4)m, other loss of USD(872.3)m and loss before benefit for taxes of USD(1.20)bn.
Schwarzman says: ‘2008 was one of the most challenging operating environments in the last several decades. While not immune to declining markets and weak global economies, Blackstone operates with a strong balance sheet, prudent and patient investment practices and a deep bench of talented portfolio operations executives to work with our portfolio companies. We ended the year with substantial dry powder across our real estate, private equity and credit businesses and think we are well poised to make highly attractive investments in the years ahead. Severe market dislocations have meaningfully altered the competitive landscape and our competitive position remains very strong in all our businesses.’
