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From the Opalesque team: The Blackstone Group LP’s third quarter investor conference call began at a few minutes after 11:00 am ET on Thursday morning and by the time it finished the “good sized recession” Chairman and CEO Stephen Schwarzman expects to rumble through the US and Europe could be heard approaching as the DJIA had dropped a further -175 points.

Although the firm posted a ($509m) loss for 3Q08 it also announced quarterly management and advisory fees rose to a record $462m (a 35% increase from 3Q07 results) and would allow for a quarterly priority distribution of $0.30 per common unit.

The firm’s Marketable Alternative Asset Management (MAAM) which includes its hedge fund investments in the form of fund of hedge funds and proprietary hedge funds has not been spared the effects of the financial crisis. MAAM reported negative revenues of ($48m) however, the firm also reflected higher fee earning assets under management in this area as base management fees increased by $43m in MAAM (+49% compared with 3Q07).

Asked by an analyst to comment on the recent topic of the future of fee structures which has been peppered through the industry Schwarzman only noted that Blackstone has not had fee pressure on the funds, but that there was a subtle pressure within the broader markets which comes in the form of co-investment requests.

Addressing the hedge fund industry specifically, Schwarzman noted a large majo......................

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