Blackstone reported a 9.2% drop in third-quarter distributable earnings to $1.72 billion, or $1.32 a share, the company said on Thursday. On a per-share basis, distributable earnings fell 13%.
Higher interest rates and inflation driven by rising energy prices subdued dealmaking during the period, according to Bloomberg. The $1.32 a share topped the $1.26 average analyst estimate, according to Bloomberg.
"There was a fair amount of volatility in the quarter and in markets, and that showed up in slowing the IPO market a bit and muted transaction activity as well," President Jon Gray told Bloomberg.
Global M&A activity dropped 41% from the prior quarter, according to Reuters, which cited LSEG data.
Total assets under management grew 10% from a year earlier to $1.37 trillion. Inflows totaled $63.3 billion, with the credit and insurance business accounting for more than half. Fee-related earnings rose 6%.
Distributable earnings at the credit and insurance arm, which manages more assets than any other Blackstone unit, gained 4% to $433 million, snapping a two-quarter slide. Real estate distributable earnings fell 10%, and private equity fell 7%. Infrastructure was the best-performing strategy, with a 6.4% return.
"There's been no private credit apocalypse," Gray said, according to Bloomberg. He added that inflows at the Blackstone Private Credit Fund, known as BCRED, remain "muted" and "will get better with time." Gray said he anticipates solid results in the fourth quarter and through the coming year.
Blackstone held $228.9 billion of dry powder as September closed, with real estate allotted $46.9 billion and private equity $91.5 billion. The firm put $30.1 billion to work across the third quarter.
Blackstone beat second-quarter expectations with distributable earnings of $1.52 a share, a 26% increase from a year earlier. Assets under management reached nearly $1.35 trillion in that quarter.
BCRED redemption requests reached 10% of shares outstanding in the second quarter, and Blackstone capped withdrawals at 5%, the standard industry ceiling. Blackstone indicated last month that requests stayed high in the third quarter, according to Reuters.
Blackstone stock has fallen 29% this year through Wednesday.
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