The Blackstone Group made a net loss of USD193.3m in the second quarter of 2010, compared to a net loss of USD164.3m for the second quarter of 2009.
For the second quarter of 2010, total segment revenues were USD552.3m, up significantly from USD403.6m for the second quarter of 2009.
The improvement was driven by increases in investment income derived from an increase in the carrying value of the underlying portfolio investments in the private equity and real estate segments, and by increased fees earned in the financial advisory segment.
These increases were partially offset by decreases in performance fees and allocations.
Total segment expenses were USD330.8m for the second quarter of 2010, an increase from USD230.8m for the second quarter of 2009.
The increase in compensation and benefits to USD242.6m for the second quarter of 2010 was primarily driven by an increase in performance fee related compensation and an increase in base compensation.
GAAP results for the second quarter of 2010 included revenues of USD550.1m, compared to USD406.4m for the second quarter of 2009, and net loss attributable to The Blackstone Group of USD193.3m, compared to a net loss of USD164.3m for the second quarter of 2009.
Global equity markets declined sharply in the second quarter of 2010, while credit markets were flat to slightly down and spreads moderately widened. Volatility increased and investors became more risk averse, responding to growing concerns over the strength of the economic recovery, European sovereign debt issues and regulatory uncertainty.
In real estate, the fundamental picture continued to improve in the second quarter. In office, certain markets continue to show improvements in occupancy trends and an increasing level of leasing activity. In hospitality, industry revenue per available room, a hospitality industry metric, grew six per cent in the second quarter, and has increased for four consecutive months, following nearly two years of declines.
Stephen A. Schwarzman, chairman and chief executive officer, says: “Our diversified business model has continued to provide us stability and growth. While adverse global securities markets performance had a negative impact on performance fees in the second quarter, we continue to see signs of improvement in the fundamentals across our portfolio, which benefited the carrying values of investments in Blackstone funds particularly in real estate. In addition, our successful long-term investment track record on behalf of our limited partners allowed us to raise new funds even in a most challenging fundraising environment, bringing us to USD111bn in total assets under management at period end.”
