Real Estate might very well be the main theme of the first quarter for publicly listed private equity firms.
In one of the biggest deals so far this year, Blackstone paid $9.4 billion for nearly 600 shopping malls in the United States from Centro Properties, a struggling Australian-based property firm.
Blackstone has $8.6 billion of “dry powder” remaining for real estate, and the firm just launched its next property fund, which is reported to be seeking $10 billion in fresh capital. The firm’s last real estate fund,
Overall, Blackstone and its rivals, including
Shares of Blackstone rose nearly 2 percent on the day it announced earnings, which rose 58 percent over last year and beat analysts’ expectations. The company reported economic net income of $568 million, or 51 cents a share, compared to $360 million, or 32 cents a share, in ENI last year. Analysts who cover publicly listed private equity firms say that ENI, which strips out non-cash charges for the vesting of equity-based compensation, is the best way to measure financial results attributable to common shareholders. In all, Blackstone reported a record $150 billion in total assets under management at the end of the quarter.
KKR, it seems, is also getting on the real estate bandwagon. KKR hired former Goldman Sachs partner Ralph Rosenberg to help ramp up the firm’s real estate exposure. It’s not clear yet whether KKR plans to launch a dedicated real estate fund, but Michael Kim, an analyst who covers KKR for Sandler O’Neill, predicted that the firm would make some real estate investments from its existing funds.
In private equity, the firm rode IPOs to higher-than-expected earnings, following the firm’s successful exits from Nielsen, the ratings company, and HCA, the hospital chain. Investors, however, were more sanguine on KKR’s earnings, sending the firm’s shares down more than 2 percent on the day earnings were announced.
“As returns continue to improve, and as long as markets remain cooperative,” Kim said, “you’re going to see more and more of these exit opportunities.”
KKR’s ENI hit $743 million in the first quarter, up from $675 million a year ago. After-tax ENI per share was 96 cents compared to 93 cents a year ago.
The firm garnered some mega-sized commitments to its new
The firm reported a 7 percent rise in pretax distributable earnings in the first quarter. Earnings were $103 million, or 20 cents a share compared with $96 million, or 19 cents a share, in the first quarter of 2010. The firm says distributable earnings, which exclude compensation costs made to the company’s founders, is the most accurate way to measure profits available to shareholders.
Including such compensation costs, the company ran a loss of $103 million, compared to a loss of $84 million in the first quarter of 2010.
Fortress, which has $43.1 billion under management, saw a slight decline in those assets during the quarter, with the firm reporting $614 million in investor redemptions.
Rounding out U.S.-listed private equity funds is
The company, which was founded in 1990 by Leon Black, went public in March and currently trades below its $19 a share offering price. The firm has about $70 billion in assets under management, a rise of $14 billion over the $56 billion it managed one year ago.
Other private equity firms are thought to be in the IPO pipeline. The Financial Times reported this week that Los Angeles-based