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NEW YORK — Private equity firm Blackstone Group LP said Wednesday its first-quarter loss narrowed as management and advisory fees increased.
Despite the improvement, Tony James, the company's president and chief operating officer, remained cautious about any signs of recovery in the economy. Since early March, the broader market has rebounded from multiyear lows amid hope of signs that the economy is starting to improve.
"The underlying economy continues to decline," James said, adding that he stands by a statement he made about a year ago that the current economic turmoil is deeper and more severe than those in recent history.
The timing of a turnaround is still uncertain, James added.
Blackstone, which makes its money buying distressed companies and then selling them for a profit, said it lost $231.6 million, or 84 cents per common unit, compared with a loss of $251 million, or 95 cents per common unit, during the same quarter last year.
The company's economic net loss after taxes, which excludes compensation charges tied to its initial public offering, was $82.4 million, or 7 cents per share, during the first quarter, compared with an economic net loss of $66.5 million, or 6 cents per share, during the year-ago quarter. Blackstone went public at the peak of the private equity boom in June 2007.
Blackstone said total revenue fell 31 percent to $47.1 million from $68.5 million during the year-ago period.
Analysts polled by Thomson Reuters, on average, forecast a loss of 10 cents per share on revenue of $64.3 million.
Blackstone generated $344.6 million in management and advisory fees during the first quarter, a 7 percent increase compared with the same quarter a year earlier. Assets under management that generate fees fell slightly to $92.2 billion at the end of the first quarter, compared with $92.9 billion at the same time last year.
Blackstone's corporate private equity division revenue turned positive in the first quarter because of performance fees earned in one of the firm's funds. The unit generated $68.4 million in revenue.
The real estate division reported negative revenue of $211.9 million because of a decline in the value of certain investments. Negative revenue can occur when a firm has to reverse gains it previously reported tied to an investment.
Revenue in marketable alternative asset management more than tripled to $99.5 million amid improving performance fees and a decline in investment losses, while financial advisory revenue improved 29 percent to $92 million because of an increase in restructuring and reorganization advisory services.
Overall, Blackstone saw a sharp decrease in losses from its fund investment activities. Losses from fund investments shrunk to $34.8 million from $215.6 million.
After not paying a distribution to common unit holders in the fourth quarter, Blackstone Group said it will resume payments. It declared a distribution of 30 cents per common unit. The distribution will be made on June 12 to unit holders of record as of May 29.
The company aims to pay out an annual distribution of $1.20 per unit each year.
Shares of Blackstone rose $1, or 8.2 percent, to close at $13.16. Shares have traded between $3.55 and $20.98 during the past year.
