Blackstone Group posted much wider than expected losses yesterday, but the world’s second-biggest private equity company has called the bottom of the credit crunch.

Blackstone, which is listed in New York, said that it made a pretax loss of $509.3 million (£323.1 million) for the quarter to September, a loss of 44 cents a share in a result that was much worse than analysts had expected. The company said that it had written down the value of about a third of its companies since the beginning of the year.

In the UK, Blackstone owns United Biscuits, the food producer, Center Parcs, the holiday resort chain, Tragus, the restaurant group that runs Café Rouge, and Merlin, the Madame Tussauds owner. The fund also owns huge global brands including the Hilton Hotels group and Harrah’s, the casino chain.

Blackstone and other global buyout houses have been hamstrung by the financial turmoil since last August. However, Tony James, Blackstone’s chief operating officer, said he believed that liquidity was returning to the market. “I believe the credit market has bottomed out,” he said.

Stephen Schwarzman, Blackstone’s founder and chief executive, assured investors that the fund was in good shape. “It has a strong balance sheet, scale and breadth of business and continued strong investment performance,” he said. However, the private equity company gave warning that it might not make any distribution to investors in the fourth quarter. Any payout would be “significantly lower” than the 30 cents a share distributed to investors this quarter, the fund said.

Mr James assured investors that the outlook for 2009 distributions looked “pretty secure”. Shares in Blackstone closed down by 12.2 per cent at $7.55.

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