Global alternative asset manager Blackstone Group reported a 90% drop in profit during the fourth quarter of 2007 compared to the same period in 2006 and warned that conditions will remain difficult for the rest of the year or longer.
Net income fell from $808 million to $88 million, due to falling market conditions in the United States, Western Europe, Asia and other parts of the world.
The credit crunch has made banks reluctant to lend out large amounts of money, damaging the profitability of private equity companies and putting a halt to private equity deals.
Lack of available financing in the U.S. and Europe for large leveraged transactions limited our transaction fees, said founder and Chairman Steve Schwarzman. Difficult market conditions in the U.S. and Europe continue in 2008 and there is little visibility on when these conditions might improve.