Blackstone Group's earnings took a hit but not for the reasons you might think. The firm's private equity business reported strong enough revenues, $227.3 million, up 42 percent from a year ago. The real downer was real estate. Revenue from which declined 44 percent to $109 million. The real estate division woes can be linked to the credit crunch in large part. You've got to wonder if the firm isn't regretting its big bet on real estate. We'll have an answer in a few more quarters. A rebound isn't out of the question. The Hilton deal will apply to the next quarter. All in all a disappointing performance that may make it even tougher for more private equity firms to go public.

For more:
- here's the New York Times article

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