Blackstone is one of the world’s biggest private-equity firms. Its job is to buy companies, fix them and sell them. The selling part just got harder. Cash from asset sales fell 34% from a year earlier in the third quarter, AnnaMaria Andriotis reports in Friday’s Journal (B1). In the buyout unit, it fell 49%.
Blackstone’s name for that cash is net realizations, the proceeds from selling what it owns. The quarter started well. Jersey Mike’s, the sandwich chain Blackstone bought in 2024, went public. Then the Fed raised rates in mid-September, and sales and IPOs slowed. CEO Stephen Schwarzman told analysts Thursday, Oct. 22, that AI is powering growth in many areas while a higher cost of capital has hurt sentiment. He also cited geopolitics and the midterm elections. Talk of a 2026 deal rebound has faded.
Not every part of the firm slowed. Realizations in credit and insurance rose 43%, helped by the huge borrowing behind AI data centers. Distributable earnings, the number dividend investors watch, came in at $1.7 billion, or $1.32 a share. That beat expectations but was down from $1.52 a year earlier. Fee-related earnings rose 6% to $1.57 billion. Schwarzman said the firm expected the drop and sees an “outstanding” 2027. By the paper’s table, Blackstone (BX) rose $9.18 to $118.75 on Thursday, about 8% computed. The story itself doesn’t mention the stock.
Seven years and counting
Thursday’s Journal (B10, Laura Kreutzer) showed how long the wait has become. Of 33,853 private-equity-backed companies worldwide at the end of September, 8,074, or nearly 24%, had been held at least seven years, per PitchBook. The old norm was three to five. Higher rates made exits hard, so firms sit on companies longer. A Summit Leadership survey of 176 private-equity executives found 72% had put a new CEO into more than a quarter of their companies. Dan Hawkins of Summit says sponsors stuck with assets now want an operator in the top job. Some are pushing holds out another two or three years.
Our read
Investments/Risk · IN04, with a Fixed Income · IN02 footnote. A buyout fund’s gains only turn into cash when the fund sells something. When buyers and sellers can’t agree on price, the sale waits, and so do you. Blackstone’s numbers say the selling slowed. The PitchBook count says nearly a quarter of the industry’s companies have waited seven years or more. That’s the thing to ask anyone offering you a private fund, including the new semi-liquid ones sold to regular investors. Ask when you get your money back, and who decides. The part still growing is private credit, which lends to the AI build-out. That’s lending, and lending carries its own risks. Blackstone isn’t held in any book. We watch.
Your connection is the liquidity line in any fund you own or are being offered. Pull up the prospectus or the fact sheet and find the redemption terms. A public index fund sells at that day’s price, and the cash usually lands in a day or two. Many private and semi-liquid funds let you out only quarterly. They often cap withdrawals at a small share of the fund, and they can shut the gate when everyone wants out at once. The check this week is whether any money you’ll need within five years sits behind a gate like that. Nobody shops for a raincoat in the downpour. A plan review is where you find out what’s already in the closet.