A tale of two firms

6 November 2009 By Lauren Silva

Fortress and Blackstone both went public in 2007 in highprofile, overpriced IPOs. Both have since been beaten heavily down. But their thirdquarter earnings underline the larger Blackstone’s apparently superior ability to diversify its business and keep investors on side.

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Blackstone and Fortress Investment Group both released thirdquarter earnings on November 6.

Blackstone said economic net income, its preferred earnings metric, was $275m, up from $181m for the second quarter of 2009. Feerelated earnings from operations, its revenue less expenses not including incentive income, was $95m for the third quarter of 2009, up from $87m last quarter. Feeearning assets under management were $96.3bn, up from $93.5bn at the end of last quarter. Its private equity, real estate, and credit and marketable securities segments all had increases to performance fees.

Fortress said it had a net loss of $59m in the quarter, or $0.43 per diluted share, as compared to a loss of $0.66 per share in the same quarter last year. Management fees in its private equity and hedge fund divisions fell.

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Blackstone and Fortress Investment Group both released thirdquarter earnings on November 6.

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