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Blackstone Inc, the world’s largest alternative asset manager, said on Thursday its third-quarter distributable earnings fell 16% year-on-year, owing to a sharp drop in asset sales amid a downturn in the market.

Financial markets have been rocked by geopolitical unrest from the Russia-Ukraine conflict and rising interest rates by central banks, which have hindered private equity firms like Blackstone from cashing out their investments for top dollar.

Blackstone said its net profit from asset divestments across its portfolio, including real estate, private equity, and hedge funds, fell 61% to $402.6 million, down from $1.03 billion a year ago, amid the turmoil.

“Inflation, rising interest rates and a slower economy, combined with ongoing geopolitical turmoil, have created an extremely difficult environment for investors to navigate,” Blackstone Chief Executive Stephen Schwarzman said during an analyst earnings call on Thursday.

Blackstone’s stock was down 3.1% at $85.02 per share, while the broader market was trading up in the afternoon session.

Distributable earnings — the cash used to pay dividends to shareholders — fell to $1.4 billion from $1.6 billion a year earlier. That resulted in distributable earnings per share of $1.06, down from $1.28 a year ago, but slightly above the average analyst estimate of 99 cents, according to Refinitiv.

During the quarter, Blackstone said its opportunistic real estate funds fell 0.6%, corporate private equity funds depreciated by 0.3%, and hedge funds gained 1%. By comparison, the benchmark S&P 500 index was down 5.28% in the same period.

Under generally accepted accounting principles, Blackstone reported a net income of just $2.3 million, a massive drop from $1.4 billion posted a year earlier, owing to unrealized investment losses of $1.1 billion driven by a drop in the value of its holdings.

Blackstone’s fee-related earnings, a closely watched metric that reflects income from lucrative management fees, jumped 51% to $1.2 billion, driven by growth in its credit business and the completion of asset management deals struck last year with insurance firms, including American International Group Inc and Allstate Corporation.

Blackstone also said it invested $31.3 billion on new acquisitions during the quarter, retained $182 billion of unspent capital, raised $45 billion of new capital, and had total assets under management of $951 billion. It declared a dividend of 90 cents per share.

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