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Jan. 30, 2020, 7:51 a.m. EST

Blackstone profit buoyed by gains on investments

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By Miriam Gottfried

Blackstone Group Inc. reported a solid fourth-quarter profit as the firm posted bigger gains on its investments, and the portion of earnings that could be returned to shareholders rose over the year-ago quarter.

The firm posted a profit of $483.1 million, or 71 cents a share, compared with a loss of $10.9 million, or 2 cents a share, a year earlier.

The value of Blackstone's main private-equity portfolio rose by 1.5% during the quarter. That compares with the 2.6% growth it posted in the third quarter and a decline of 2.9% in what was a choppy fourth quarter of 2018. The S&P 500 climbed 8.5% in the fourth quarter of 2019.

Blackstone's distributable earnings, the share of profits that could be returned to shareholders, rose to $914 million, or 72 cents a share, from $722.1 million, or 57 cents a share, a year earlier. The figure exceeded the 66-cent consensus estimate of analysts polled by FactSet.

Blackstone said its assets under management were $571 billion, up 21% from a year earlier. The private-equity firm has set a goal of reaching $1 trillion in assets by 2026 and is expanding into new business lines.

The firm said in a regulatory filing earlier this month that it had raised $3.4 billion of the $4.6 billion it is targeting for its first fund dedicated to investments in the life-sciences sector.

And in November, Blackstone announced a deal to take a majority stake in MagicLab, the owner of dating app Bumble. The deal, which values MagicLab at $3 billion, is part of Blackstone's broader push to invest more in fast-growing companies.

The firm's shares have surged nearly 60% since it said in April it would abandon its partnership structure to become a corporation, following similar announcements by rivals. The change came as a result of the new tax law Congress passed in late 2017, which lowered the highest corporate rate to 21% from 35%.

Blackstone's conversion to a corporation was completed July 1.

The firm's real-estate business has remained active in recent months. On Jan. 14 its nontraded real-estate investment trust, known as BREIT, said it would acquire the real estate of the MGM Grand and Mandalay Bay resorts and casinos through a joint venture with MGM Growth Properties LLC.

The agreement followed an earlier deal by BREIT to buy the assets of the Bellagio from MGM Resorts International in a sale-leaseback transaction.

Blackstone said it would pay a 61-cent dividend for the quarter, compared with 58 cents for the year-earlier quarter.

Write to Miriam Gottfried at Miriam.Gottfried@wsj.com

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