Economic Net Income After Taxes was $275million for the third quarter of 2009, up from $181million for the second quarter of 2009 and a loss of $(503)million for the third quarter of 2008.

Net Fee Related Earnings from Operations were $95million for the third quarter of 2009, up from $87 million for the second quarter of 2009 and down from $152 million for the third quarter of 2008.

Adjusted Cash Flows From Operations were $132 million during the third quarter of 2009, up from $102 million for the second quarter of 2009 and up from a loss of $(9) million for the third quarter of 2008.

Fee-Earning Assets Under Management totaled $96.3 billion, up from $93.5 billion at June30, 2009.

GAAP Net Loss Attributable to The Blackstone Group L.P. was $(176) million for the third quarter of 2009, including net IPO and acquisition-related charges of $201million, compared to a GAAP Net Loss of $(340)million for the third quarter of 2008, which included net IPO and acquisition-related charges of $203million.

Blackstone received an A+ rating with stable outlook from Fitch and remains A rated with stable outlook from Standard & Poor's. Blackstone executed its first bond issuance in the third quarter of 2009, issuing $600 million 10-year 6.625% notes.

Blackstone declares a quarterly priority distribution of $0.30 per common unit.

The Blackstone Group L.P. (NYSE: BX) today reported its third quarter 2009 results.

For the third quarter of 2009, Total Segment Revenues were $603.8million, up $200.2million from $403.6million for the second quarter of 2009 and up $833.0 million from $(229.2)million for the third quarter of 2008. The year-over-year change was driven by net appreciation of the underlying portfolio investments in the Corporate Private Equity and Credit and Marketable Alternatives segments, as well as stabilization in the fair value of the Real Estate segment's underlying portfolio investments. These increases were partially offset by decreased advisory fees earned in the Financial Advisory segment. For the nine months ended September 30, 2009, Total Segment Revenues were $1.1billion up significantly from $179.3million for the same period in 2008.

Total Segment Expenses totaled $325.4 million, up from $230.8 million for the second quarter of 2009 and from $280.0 million for the third quarter of 2008. The largest component of segment expenses, Total Segment Compensation and Benefits was $249.9million for the third quarter of 2009, up from $159.1million for the second quarter of 2009 and from $197.9million for the third quarter of 2008. The change from 2008 was driven by an increase in carried interest related compensation allocations and accruals in the Corporate Private Equity, Credit and Marketable Alternatives and Real Estate segments. Excluding the impact of carried interest allocations, Compensation and Benefits was $199.2million for the third quarter of 2009, down from $226.1million for the third quarter of 2008. Compensation and Benefits was $478.6million for the nine months ended September 30, 2009, an increase from $461.1million for the nine months ended September30, 2008, reflecting an increase in carried interest accruals, partially offset by a decrease in personnel compensation of $30.9 million from 2008.

GAAP results for the third quarter of 2009 included Revenues of $597.0million, up from $406.4 million for the second quarter of 2009 and $(160.3)million for the third quarter of 2008. Net Loss Attributable to The Blackstone Group L.P. was $(176.2)million, compared to $(164.3) million for the second quarter of 2009 and $(340.3) million for the third quarter of 2008. GAAP results for the nine months ended September 30, 2009 included Revenues of $1.0billion, compared to $261.9million for the nine months ended September30, 2008, and Net Loss Attributable to The Blackstone Group L.P. of $(572.0)million, compared to $(747.9)million for the nine months ended September 30, 2008.

Most global equity and debt markets continued to move higher in the third quarter of 2009 as investors anticipated a bottoming of the global economy. Emerging markets experienced the greatest increase consistent with generally more favorable economic growth prospects as compared with the U.S. and Europe. Credit markets experienced similar improvement, as credit spreads tightened sharply. Credit delinquencies and charge-offs continue to be weak and unemployment, particularly in the U.S., remains high.

There has been some improvement in lending markets, with lower borrowing rates and an improved willingness on the part of banks to increase lending. Access to equity capital markets has improved and volumes of both IPOs and secondary equity markets have increased considerably throughout 2009. If these favorable trends are sustained, Blackstone's funds could participate in an increased number of acquisitions and dispositions.

Commercial real estate trends in the U.S. and Europe continued to worsen in the third quarter of 2009, with lower occupancy and pricing trends. Global hospitality trends also declined, including revenue per available room ("RevPAR"), an important hospitality industry metric. Commodities prices were relatively flat during the third quarter although materially higher than one year ago. The dollar continued to weaken against most global currencies, although it rose modestly against the Pound Sterling.

Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, "It has been just over a year since the onset of the global financial crisis. Equity and debt markets have continued to heal, many companies have reduced expenses and inventory levels, the cost of borrowing has declined and the availability of credit is slowly increasing. We believe the worst is behind us though a recovery could be gradual and uneven. We see many opportunities to deploy our substantial available capital across each of our asset management businesses with attractive potential risk-return for our fund investors."

The table below details Blackstone's Economic Net Income, Net Fee Related Earnings from Operations, Adjusted Cash Flows from Operations and Fee-Earning Assets Under Management as of and for the three and nine months ended September 30, 2009 and 2008. Economic Net Income, Total Segments includes unrealized gains (losses) and the direct compensation impact related to those gains/losses, but excludes IPO and acquisition-related charges.

                                                          Three Months Ended September 30,   Variance                    Nine Months Ended September 30,   Variance               
                                                          2009            2008               $                  %        2009            2008              $               %      
                                                          (Dollars in Thousands, Except per Unit Amounts)                                                                         
 Economic Net Income, Total Segments                      $  278,357      $  (509,266    )   $  787,623         155  %   $  357,918      $  (502,908  )    $  860,826      171  % 
 Provision (Benefit) for Income Taxes (a)                    3,009           (6,720      )      9,729           145  %      (15,836  )      (99,491   )       83,655       84   % 
 Economic Net Income, After Taxes                         $  275,348      $  (502,546    )   $  777,894         155  %   $  373,754      $  (403,417  )    $  777,171      193  % 
                                                                                                                                                                                  
 Economic Net Income, After Taxes per Adjusted Unit (b)   $  0.25         $  (0.45       )   $  0.69            NM       $  0.33         $  (0.36     )    $  0.69         NM     
 Net Fee Related Earnings from Operations                 $  94,939       $  151,810         $  (56,871     )   -37  %   $  271,247      $  309,814        $  (38,567  )   -12  % 
 Adjusted Cash Flows from Operations                      $  131,934      $  (9,001      )   $  140,935         NM       $  309,014      $  148,122        $  160,892      109  % 
                                                                                                                                                                                  
 Fee-Earning Assets Under Management:                                                                                                                                             
 Corporate Private Equity                                 $  25,184,161   $  25,349,192      $  (165,031    )   -1   %                                                            
 Real Estate                                                 23,692,257      22,576,659         1,115,598       5    %                                                            
 Credit and Marketable Alternatives (c)                      47,448,212      51,799,414         (4,351,202  )   -8   %                                                            
 Total Fee-Earning Assets Under Management                $  96,324,630   $  99,725,265      $  (3,400,635  )   -3   %                                                            
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(a)Represents the implied provision (benefit) for income taxes calculated using the same methodology applied in calculating the tax provision for The Blackstone Group L.P.

(b) Adjusted Units represents the weighted-average fully diluted unit count for Economic Net Income purposes. A reconciliation of this item to the equivalent GAAP measure is presented in Exhibit 5 to this release.

(c) The variance of $4.4billion is partially attributed to a $2.8billion decrease in Fee-Earning Assets Under Management related to Blackstone's decision to restructure its Credit and Marketable Alternatives segment and liquidate its single manager proprietary hedge funds.

SEGMENT REVIEW

Corporate Private Equity

Corporate Private Equity had revenues of $226.9million for the third quarter of 2009, compared with revenues of $198.6million for the second quarter of 2009 and $(68.3)million for the third quarter of 2008. The change from 2008 was driven principally by an increase in performance fees which was attributable to the net appreciation in the fair value of the segment's underlying portfolio investments, particularly in publicly traded investments and consumer and energy sector investments. The fair value of the Corporate Private Equity portfolio appreciated by 5% in the third quarter of 2009, versus net depreciation of 8% in the third quarter of 2008.

Net Fee Related Earnings from Operations were $21.2 million for the third quarter of 2009, down from $23.9million for the second quarter of 2009 and up from $16.2million for the third quarter of 2008. The change from 2008 primarily reflected an increase in fee related revenues. Economic Net Income was $135.7million for the third quarter of 2009, up from $123.8million for the second quarter of 2009 and up from negative $(126.5)million for the third quarter of 2008.

Compensation and Benefits expense increased to $69.9million from $54.3million for the second quarter of 2009 and $34.2million for the third quarter of 2008. The change from 2008 was primarily due to an increase in compensation related to carried interest allocations. Other Operating Expenses of $21.3million remained consistent with the second quarter of 2009 and down from $24.0 million for the third quarter of 2008 reflecting Blackstone's ongoing focus on non-compensation expenses.

Fee-Earning Assets Under Management were relatively unchanged at $25.2billion compared with the second quarter of 2009 and the third quarter of 2008.

Transaction activity has increased recently in terms of both new commitments as well as realizations. At September 30, 2009, $1.3 billion of Limited Partner Capital had been committed to deals by the segment's funds and not yet deployed. Subsequent to the end of the third quarter of 2009, over $600million of Limited Partner Capital was committed to new transactions. The segment's funds also closed or announced four realizations in the third quarter of 2009 and subsequently. In addition, the funds are examining several opportunities for initial public offerings.

Limited Partner Capital Deployed totaled $109.1 million for the third quarter of 2009, including new and follow-on investments, a decrease from $338.3 million for the second quarter of 2009 and $1.5billion deployed for the third quarter of 2008.

Corporate Private Equity had nine-month revenues of $493.6million, compared with negative revenues of $(92.6)million in the same period of 2008. The principal driver of the year-over-year change was an increase in performance fees and investment income as a result of net appreciation in the fair value of the portfolio investments, principally publicly-traded portfolio investments and certain portfolio investments in the energy, healthcare and consumer sectors, as well as gains related to foreign currency fluctuations.

Real Estate

Real Estate had revenues of $100.2million for the third quarter of 2009, compared with revenues of negative $(18.9)million for the second quarter of 2009 and $(273.7)million for the third quarter of 2008. The change from 2008 was due to positive performance fees accrued, driven by the performance of certain debt strategy portfolio investments as well as stabilization in the fair value of the segment's underlying portfolio investments. The fair value of the Real Estate portfolio depreciated by 0.4% in the third quarter of 2009, versus 10% in the third quarter of 2008.

Net Fee Related Earnings from Operations were $33.4million in the third quarter of 2009, up from $32.9million for the second quarter of 2009 and $32.7million for the third quarter of 2008. Economic Net Income was $44.2million for the third quarter of 2009, an improvement from $(25.1)million for the second quarter of 2009 and $(309.6)million for the third quarter of 2008.

Compensation and Benefits were $42.5million compared to $(6.8)million for the second quarter of 2009 and $21.1million for the third quarter of 2008. The change from 2008 was due to a decrease in reversals of prior period carried interest allocations to certain personnel in the third quarter of 2009. Other Operating Expenses of $13.4million remained consistent with the second quarter of 2009 and down from $14.8million for the third quarter of 2008 reflecting Blackstone's ongoing focus on non-compensation expenses.

Fee-Earning Assets Under Management increased $167.1million from the second quarter of 2009 and $1.1billion from the third quarter of 2008 to $23.7billion.

The Real Estate funds have seen an increase in potential investment opportunities in recent months. At September 30, 2009, $179.7 million of Limited Partner Capital had been committed to deals by the segment's funds and not yet deployed. Subsequent to the end of the third quarter of 2009, over $165million of the Limited Partner Capital committed has been deployed and over $375million of Limited Partner Capital was committed to or is under letter of intent by the funds with regard to new transactions.

Limited Partner Capital Deployed totaled $35.0 million for the third quarter of 2009, a decrease from $252.7 million and $131.1 million deployed during the second quarter of 2009 and third quarter of 2008, respectively.

Real Estate had negative nine-month revenues of $(131.3)million, compared with negative revenues of $(240.2)million for the nine months ended September 30, 2008. The principal drivers of the year-over-year change was a reduction in the reversal of Blackstone's prior period carried interest allocations and an increase in Base Management Fees, a function of an increase in Fee-Earning Assets Under Management.

Credit and Marketable Alternatives (CAMA)

CAMA had revenues of $179.4million, compared with $140.4million for the second quarter of 2009 and negative revenues of $(48.0)million for the third quarter of 2008. The change from 2008 was due primarily to improved returns on the segment's fund of hedge funds and credit-oriented funds, resulting in positive performance fees and allocations and investment income for the third quarter of 2009.

The fund of hedge funds posted a composite net return of 5.5% for the third quarter of 2009 and 12.9% for the nine months ended September 30, 2009. The credit-oriented hedge funds posted a composite net return of 13.0% for the third quarter of 2009 and 22.5% for the nine months ended September 30, 2009. The segment's mezzanine funds posted a composite net return of 5.7% for the third quarter of 2009 and 11.7% for the nine months ended September 30, 2009.

Net Fee Related Earnings from Operations were $24.0million for the third quarter of 2009, a decrease from $25.2million for the second quarter of 2009 and from $42.4million for the third quarter of 2008. The main driver of the decline from 2008 was a decrease in Base Management Fees, partially attributable to Blackstone's restructuring of its proprietary single manager hedge funds, partially offset by a reduction in Compensation and Benefits and Other Operating Expenses. Economic Net Income was $81.5million for the third quarter of 2009 compared to $66.5million for the second quarter of 2009 and a loss of $(134.3)million for the third quarter of 2008.

Compensation and Benefits were $79.8million, up from $57.4million in the second quarter of 2009 and $60.3million in the third quarter of 2008. The increase from the third quarter of 2008 was principally driven by carried interest allocations to certain personnel due to positive returns on certain of Blackstone's credit-related funds, partially offset by a decline in personnel compensation. Other Operating Expenses of $18.1million were down from $26.1million for the third quarter of 2008 reflecting Blackstone's ongoing focus on non-compensation expenses.

Fee-Earning Assets Under Management in the third quarter of 2009 totaled $47.4billion compared with $44.7billion for the second quarter of 2009 and $51.8billion for the third quarter of 2008. The decrease from 2008 was principally due to redemptions and the liquidation of certain of Blackstone's proprietary single manager hedge funds.

Limited Partner Capital Deployed in certain carry credit-oriented funds totaled $87.3million for the third quarter of 2009, down from $112.1million for the second quarter of 2009 and $657.6million for the third quarter of 2008. The decrease was related to a reduction in new investment activity in certain of Blackstone's credit-oriented funds as a result of a reduction in completed leveraged finance transactions.

CAMA had revenues of $419.0million for the nine months ended September 30, 2009 compared with revenues of $207.3million for the same period of 2008. The increase was primarily driven by improved returns on Blackstone's investment in its funds of hedge funds and its credit-oriented and proprietary hedge funds during the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008.

Financial Advisory

Revenues were $97.3 million for the third quarter of 2009, an increase from $83.5million for the second quarter of 2009 and a decrease from $160.7million for the third quarter of 2008. The change from 2008 was primarily driven by a decrease in fees generated by Blackstone's fund placement business. Fees earned in the fund placement business decreased $41.7 million the market for new capital raising remained challenged with capital raised at cyclical lows. Fees generated by the corporate and mergers and acquisitions advisory services and the restructuring and reorganization advisory services businesses decreased $20.8 million from the third quarter of 2008 due principally to large transactions fees earned in the third quarter of 2008. The fees generated by these businesses increased $7.7million from the second quarter of 2009 due to continued strong demand for Blackstone's advisory services.

Net Fee Related Earnings from Operations were $16.4million for the third quarter of 2009, an increase from $4.9million for the second quarter of 2009 and a decrease from $60.5million for the third quarter of 2008. The primary catalyst for the decrease from 2008 was lower advisory fees, partially offset by a decrease in Compensation and Benefits as a portion of compensation is directly related to the profitability of each of the advisory services businesses.