Blackstone Reports 3Q Profit
PE firm reported that it has a strong liquidity position after completing a $600 million bond offering.
November 6, 2009
The Blackstone Group said Friday that it earned $275 million in profits for the third quarter as the value of its investment portfolios increased.
The New York firm's corporate private equity segment produced $226.9 million in revenues for the third quarter of 2009, compared with a $68.3 million loss in the third quarter of last year. Blackstone's portfolio, which includes a diverse range of companies like The Weather Channel, for example, appreciated 5% in the third quarter of 2009 compared with depreciating 8% in the third quarter of 2008.
"Our liquidity and balance sheet are very strong," said Stephen Schwarzman, chief executive of the Blackstone Group, in a conference call. "We continue to evaluate opportunities to extend our various business lines."
Blackstone, a firm that oversees $96.3 billion in assets, has a fully-available $850 million revolving credit-facility and $486.5 million in cash on hand.
The firm further fortified its capital foundation this quarter by completing its first-ever bond offering, selling $600 million in 6.6% notes with a 10-year term.
Investors responded positively to Blackstone's upbeat results, driving the investment firm's shares up 5.9% to $14.69 each on the New York Stock Exchange in midday trading.
This year the private equity firm has deployed $1.3 billion in capital to new deals like the $2.7 billion agreement to acquire theme park operator Busch Entertainment Corp. from Anheuser-Busch InBev in October.
Schwarzman said there were signs the economy was improving, referencing the nation's positive GDP growth at 3.5%. But he also pointed out that the current 10.2% unemployment rate has to be reckoned with "for this [economic] recovery to continue in a sustained fashion."
Blackstone reported that its corporate advisory business, which is largely focused on providing M&A and restructuring advice to corporate executives, produced $97.3 million in third-quarter revenues. Not surprisingly, considering the depressed state of the merger business in 2009, the results were down from the third quarter of 2008, when the unit posted $160.7 million in revenues.
Additionally, the fees the firm earns from raising capital for private equity and other funds decreased by $41.7 million in the third quarter, which Blackstone said reduced its overall advisory fee revenue.
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