Blackstone earnings rise, distribution changes

NEW YORK (Reuters) - Private equity firm Blackstone Group reported a jump in quarterly earnings on Thursday that beat analysts' estimates as the value of its vast private equity and real estate investments continued to rebound.

The firm also said it was changing its distribution policy from this quarter as a two-year period that gave public unitholders preference over Blackstone staff ends.

It is now expecting to distribute 10 cents for the first three quarters and a larger amount in the fourth quarter, rather than paying the same amount each quarter.

That amount will depend on profits on investments it exits during the year so is hard to predict, Blackstone said. It had previously typically distributed 30 cents to each public unitholder.

Blackstone's shares, which sold for $31 in its 2007 IPO, were down 3 percent at $14.51.

"I think we're at the beginning of the recovery, and it just gets better from here as long as the world continues to mend," Blackstone's COO Tony James said on a conference call. "If it does, the results can get a lot better from here."

The value of Blackstone's private equity portfolio rose 16 percent in the first quarter, while its real estate portfolio rose 12 percent, Blackstone said.

Economic net income was $360 million for the first quarter, compared with a loss of $82 million a year earlier. Adjusted ENI per share was 32 cents. Analysts, on average, had expected 21 cents, according to Thomson Reuters I/B/E/S/.

ENI strips out items such as noncash charges for vesting equity-based compensation, and the amortization of intangible assets. It is the measure that private equity firms prefer to report and which analysts follow.

Blackstone has a number of companies in various stages of IPO, James said. For the second half of 2009 and the first quarter of 2010, it completed or has in process about 12 realizations, including strategic sales and equity offerings.

(Reporting by Megan Davies; Editing by Ted Kerr and Maureen Bavdek)