US private equity firm Blackstone has beat estimates for the first quarter of 2010 with earnings of $360m, compared to a loss of $82m during the same period in 2009. Reporting positive results across all divisions, the firm posted fee revenues of $99m, and claims that export and credit markets were on the rise and investor appetite for risk was returning.
Chairman and CEO Stephen Schwazrman (pictured) said, “We are witnessing a positive trend in most asset classes as the economic recovery takes firmer root and the outlook for growth improves. We are seeing concrete signs of economic improvement in our portfolio and, as a result, the carrying value of investments in Blackstone funds rose meaningfully in the first quarter.”
The firm’s private equity division had revenues of $276.8m for the quarter, compared with revenues of $68.1m, Blackstone attributing the change to an increase on performance fees, allocations and investment income, which totalled $175.9m with a $45.7m realised gain. The firm invested $387.9m of limited partner capital including follow-on investments, up from $196.1m in the same quarter in 2009.
Blackstone struggled with a difficult exit market at the start of the year, following reports that the firm was planning a raft of IPOs. Flotations for Travelport and Merlin Entertainments were cancelled, and a Graham Packaging listing in New York priced below expectations, with shares opening at $10 each instead of the $14 to $16 range hoped for.
It also led a consortium to invest $600m in a Chinese agriculture company, and portfolio company Transmission Developers announced plans to develop a $3.8bn renewable power transmission line supplying New York and New England from the US-Canadian border.
Coming into the second quarter, the firm scored a coup in successfully arranging a restructure of Hilton Hotels, hammering out an agreement with lenders that sees the hotelier’s $20bn debt load reduced by $4bn, and is reportedly bidding with the Wellcome Trust for 318 branches of bailed out UK bank RBS.
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