Blackstone dives into the red following credit squeeze
Private equity group, Blackstone, dived $170 million into the red in its fourth quarter as its executives received an eleven fold increase in annual pay and benefits.
The company said ‘challenging’ business conditions and a sizeable write-down of a bond insurer drove it to a loss of $170 million in the last quarter of 2007, compared to a profit of $1.18 billion the previous year.
Revenues for the quarter also plummeted 73% to $344.9 million as costs for pay and benefits rocketed in excess of 1000% to $902.2 million from $79 million in 2006.
For the year, Blackstone’s profits fell 28% to $1.62 billion compared with $2.26 billion a year earlier. Pay for the annual period soared 802% to $2.25 billion.
Its flagship private equity division was hit by a $15.4 million loss in the fourth quarter as the credit squeeze took effect.
Blackstone deals in buyouts, real estate and Merger & Acquisition advisory and debt.