Blackstone signals deal exits will remain muted this quarter

BLACKSTONE, the world’s largest alternative asset manager, signalled that profits from selling deals will remain subdued this quarter.

The firm disclosed two preliminary profit measures tied to realisations from the start of the third quarter to Tuesday (Sep 24). It generated about US$225 million of realised performance revenue and roughly US$45 million of realised principal investment income, according to a statement.

It’s the first time Blackstone has reported the figures. In last year’s third quarter, the firm generated US$337.9 million of realised performance revenue and US$55.5 million of principal investment income.

While the numbers are not comparable, they reaffirm broader concerns across Wall Street that alternative asset managers and real estate firms will struggle to capture high-octane returns from deal exits in coming months.

Even as the Federal Reserve has promised some reprieve with its latest rate cut, the industry is still sitting on a heap of assets purchased during a lower-rate era that many buyout firms and property investors cannot sell at the prices they expected.

Blackstone shares fell 2.3 per cent to US$153.92 at 11.51 am in New York, paring their gain this year to 18 per cent.

Chief financial officer Michael Chae said in a recent conference that it will take time for exits to rebound.

“We expect a near-term lag between markets improving and pickup in realisations,” he said. “And this remains our expectation for the third quarter.”

The firm sees 2025 as “potentially much more robust”, he added. BLOOMBERG