Blackstone's Profit Falls 9.2% as Higher Rates and Inflation Slow Dealmaking

Blackstone's distributable earnings fell 9.2% to $1.72 billion, or $1.32 a share, in the third quarter, as higher interest rates and inflation driven by rising energy prices weighed on dealmaking across the industry. Even with the decline, the result topped the $1.26-a-share average estimate from analysts tracked by Bloomberg.

"A historic increase in bond yields"

Chairman and CEO Stephen Schwarzman described the quarter as an unusually difficult environment, pointing to a sharp global rise in bond yields that pushed up the cost of capital and, in turn, cooled both deal activity and investor exits. Broader M&A activity reflected the same slowdown, with global deal volume dropping 41% from the prior quarter, according to data cited by Reuters.

Despite the softer dealmaking backdrop, Blackstone's assets under management climbed 10% to $1.37 trillion, underscoring how the firm keeps growing its fee-generating asset base even when transaction activity slows. Infrastructure was again the firm's best-performing strategy, returning 6.4% for the quarter, a bright spot as other parts of the business navigated the higher-rate environment.