Net income was $647 million, down from $1.55 billion in the year-earlier period, the New York firm said. Revenue such as management fees and investment income fell 44%, while expenses including compensation went down by 15%.
In a statement CEO Stephen Schwarzman didn't mention the profit drop, choosing instead to highlight the firm's success in bringing in some $45 billion of new funds from investors. These include rich people and big public-pension funds that manage the retirement savings of teachers and other government employees.
"These results reflect the enormous confidence our firm has earned with global investors through decades of delivering strong performance and innovation," Schwarzman said.
Investment income, typically Blackstone's biggest source of revenue, tumbled 49% to $597.9 million.
Executives often try to deemphasize earnings measures derived in accordance with generally accepted accounting principles, focusing instead on their own derived measures. Such alternative measures, they say, provide a better indication of how the underlying business is performing.
In Thursday's statement the firm highlighted a derived measure known as distributable earnings, which increased 1% to $709 million.
And assets under management were $545.5 billion as of June 30, up 24% from a year earlier.
Since the financial crisis of 2008, Blackstone's strong investment performance has attracted a host of new clients, including big public-pension funds, which have allocated a bounty of money to the firm to manage in its specialty areas -- typically little-traded or hard-to-find opportunities like private companies, real estate and junk-grade corporate loans.
The investment returns were helped by strong U.S. growth since the crisis. The economy has been expanding for more than a decade, the longest such stretch in U.S. history.
And investors chased the returns due to historically low yields on more traditional investments, such as U.S. Treasury bonds.
But financial markets have rallied thanks to President Donald Trump's $1.5 trillion of tax cuts in late 2017, and more recently on optimism that the Federal Reserve is poised to cut official U.S. interest rates to further stimulate the economy.
As a result, valuations on stocks and other investments have surged, making it more expensive and difficult for Blackstone to find attractive opportunities.
Indeed, Blackstone in recent years has proven far more adept at fundraising than deploying the capital into new investments.
During the second quarter, the firm brought in $45.1 billion of new investor money, while deploying just $18.3 billion in new investments.
As a result, Blackstone's so-called dry powder -- the capital that investors have entrusted to the firm but that its investment professionals haven't yet deployed -- climbed to a record $150 billion from $133 billion at the end of March.