The firm also said a change in its distribution policy has kicked in, meaning that unitholders are likely to gain the bulk of their payout in the final quarter of the year.
Blackstone's shares, which sold for $31 in its 2007 IPO, were down 1 percent at $14.80.
The firm, one of the biggest buyout companies in the world with investments in Hilton hotels, Freescale semiconductors and SeaWorld theme parks, said the ability to do larger deals is returning while it also anticipates exiting a number of investments.
A year ago, if you could raise $1 billion... or $1.5 billion of debt, you were pretty much of a hero, said Chief Executive Stephen Schwarzman. That's dramatically changed. And the pricing of debt has gone down as well, dramatically.
While large deals weren't even vaguely possible a year ago it could be possible to do deals in the $10 billion or $15 billion range again, he said, while stressing that Blackstone has focused on smaller deals where it saw more value.
Blackstone said the value of its private equity portfolio rose 16 percent in the first quarter and its real estate portfolio rose 12 percent.
Economic net income was $360 million compared with a loss of $82 million a year earlier. Adjusted ENI per share was 32 cents. Analysts, on average, had expected 21 cents, according to Thomson Reuters I/B/E/S/.
ENI strips out items such as noncash charges for vesting equity-based compensation, and the amortization of intangible assets. It is the measure that private equity firms prefer to report and which analysts follow.
Blackstone's distribution policy change marks the end of a two-year period that gave public unitholders preference over Blackstone staff ends.
Blackstone expects to distribute 10 cents for the first three quarters and a larger amount in the fourth, rather than paying the same amount each quarter. It had previously typically distributed 30 cents to each public unitholder.
The final amount for the year will depend on profits on investments it exits during the year so is hard to predict, Blackstone said.
It has a number of companies in various stages of IPO, its COO Tony James said. For the second half of 2009 and the first quarter of 2010, it completed or has in process about 12 realizations, including strategic sales and equity offerings.
Schwarzman also said that Blackstone will remain a major client of investment bank Goldman Sachs, which was on Friday accused of fraud. For a story [nN22101433].
The ability for private equity firms to raise funds again has been improving after being hard hit by the economic meltdown, Blackstone said. James said investors are re-committing to alternatives again.
It went from essentially dead, to wounded, to on-the-way to healthy, James said. We're in the middle part of that cycle. It is certainly much better than a year ago.
Still, there are pressures from investors industry-wide on fees, with a particular focus on deal fees, he said.
There are fee pressures out there, particularly the big gorillas that are looking to set up their investments into a separately managed account structure and looking for concessions of different sorts, James said
Rival buyout firm Apollo recently agreed to reduce fees for pension fund giant Calpers on funds that Apollo manages solely for Calpers.
Blackstone has inopportunely been raising its sixth global buyout fund during the aftermath of the financial meltdown. After a two-year fundraising effort it has indicated to investors it expects to raise about $12.5 billion, one investor source who declined to be named told Reuters.
The firm's previous buyout fund, a $21 billion fund called BCP V, is now valued at 95 percent of cost, it said.
(Reporting by Megan Davies; Editing by Ted Kerr, Maureen Bavdek, Dave Zimmerman)