Are the stars aligning for private equity firms? You might think so. The deal environment has improved markedly and looms as one of the few bright spots on Wall Street right now. In addition, the IPO market has revived, raising hopes of more exits in the near future.

So, it is with great interest that Wall Street digested the upside earnings surprise from Blackstone Group. CEO Steve Schwarzman dialed into the analyst conference from Paris to discuss the strong profits results.

Excluding costs tied to the firm's 2007 IPO, profits increased to 46 cents a share from 29 cents, year-over-year. That blew away the consensus estimate of 30 cents a share, according to Bloomberg. The stock soared on the news.

The big drivers appear to have been real estate as well as better valuations of portfolio companies. Fee-earning assets under management rose to $109.5 billion from $96.1 billion, year-over-year. Real estate assets rose 13 percent.

It's been a poor stretch for the industry and the stock of Blackstone Group is seen by some as a barometer for the entire private equity market. But the wheels of recovery are turning now. The suite spot in this cycle may be just ahead. A Credit Suisse analyst recently restarted coverage of Blackstone with an "outperform" rating.

For more:
- here's the Bloomberg article

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