Private-equity giant Blackstone Group took a heavy loss in Q3, posting negative revenue figures in the face of a near-universal market decline. The company stated losses of $340.3 million in the third quarter of 2008, compared to a loss of $113.2 million one year ago. Total revenue figures were negative $160.3 million compared to a gain of more than half a billion last year.
These dull revenue figures bucked analyst expectations that the private-equity firm would succeed in posting marginal revenue gains in spite of the financial downturn. They also somewhat temper comments made by company co-founder and chairman Stephen Schwarzman last week that a bear economy isn’t a serious obstacle to profitability, and that wise investors could still take advantage.
“In periods like this, people get scared out of their minds,” said Schwarzman on October 28. “This kind of environment is tailor-made for making absolute fortunes in the private-equity business.”
The private-equity business has been relatively quiet in recent months, as the capital market has significantly tightened. Public deals have also deteriorated, with many high-profile mergers delayed or called off.