Private equity firm Blackstone Group LP posted a forecast-beating quarterly profit on Friday and said it is gearing up for more deals and IPOs as the lending and equity markets recover.

The company, which has immense real estate and private equity assets, has stepped up deal activity in the past few months, including buying Anheuser-Busch InBev's U.S. theme parks for up to $2.7 billion.

It is also considering initial public offerings for a number of its companies as well as selling to strategic buyers, and expects the IPO window to stay open at least until the beginning of next year.

Our pipeline of new deals is growing substantially, Blackstone Chief Operating Officer Tony James said on a conference call.

He said Blackstone has $27 billion of dry powder -- capital available for investment. The lion's share is in its real estate and private equity funds.

It is the latest sign of improvement in the private equity industry, which has struggled to keep portfolio companies healthy during the recession and has had limited access to financing for new deals.

On Thursday the biggest leveraged buyout this year was struck: Blackstone rival TPG and the Canada Pension Plan agreed to buy IMS Health Inc for $4 billion.

Blackstone's third-quarter earnings before income taxes, noncash charges for vesting equity-based compensation, and amortization of intangible assets -- a measure it calls economic net income (ENI) -- were $278.4 million, compared with a loss of $509.3 million a year earlier.

On an after-tax basis, ENI was 25 cents a share. Analysts expected, on average, 15 cents a share, according to Thomson Reuters I/B/E/S/.

The value of Blackstone's private equity portfolio rose by 5 percent in the third quarter, although the value of its real estate portfolio fell by 0.4 percent.

Blackstone shares were up 6.4 percent to $14.76 in afternoon trading. The shares have doubled in price this year, and the company is currently valued at $15.6 billion. It went public in June 2007 at $31 a share.

Rival hedge fund and private equity firm Fortress Investment Group LLC posted a quarterly loss on Friday, and its shares sank 3.5 percent.

NO GUNS TO HEAD

Private equity firms have had an uphill battle keeping debt-laden portfolio companies healthy during the recession. They also face the looming issue that debt taken on during the boom years 2005-07 will have to be refinanced in coming years.

Blackstone said it has been taking advantage of the improved debt markets to restructure investments in its portfolio.

Chief Executive Stephen Schwarzman said the group bought back, amended or extended more than $18 billion of debt across its private equity and real estate portfolios.

Blackstone is in talks to cut up to $5 billion of debt held by its Hilton Hotels chain, a source told Reuters last week. Blackstone and Hilton's lenders are working together in good faith, Schwarzman said.

We're optimistic that we can continue to put our companies on a sound footing and do it in a way that's attractive both for our investors and for those companies and their employees, said James. We don't have any guns to our heads.

While debt financing for new deals remains constrained, it has improved significantly in the past few months. Borrowing rates have declined and banks are more willing to lend.

Leverage ratios available for deals are now typically 4 to 5 times a company's earnings, James said, which is close to the historic multiple of about 5 but a lot lower than the peak of about 8 during the boom.

Raising money for new funds is improving, and investors are talking seriously about putting money to work, James said.

Blackstone is currently raising its sixth buyout fund, BCP VI, and has so far raised between $8 billion and $9 billion. It previously said it was aiming to raise a number in the low-to-mid teens.

Blackstone said it would pay its regular quarterly distribution of 30 cents a share to unitholders.

(Reporting by Megan Davies; Additional reporting by Paritosh Bansal; Editing by Steve Orlofsky and John Wallace)

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