Blackstone Group LP, one of the world's leading investment and advisory firms, narrowed its losses for the first quarter of 2009 aided by higher management and advisory fees.

 The private equity major said on Wednesday its net losses for Q1 stood at $232 million, including transaction-related charges of $192 million, as compared to a net loss of $251 million in the first quarter of 2008, which included transaction-related charges of $226 million.

''Blackstone continues to focus on its core investment and advisory businesses amidst a dynamic and challenging economic and market back-drop,'' said Stephen A. Schwarzman, chairman and chief executive officer.

"The underlying economy continues to decline," Tony James, the company's president and chief operating officer, said about weakening results.

He reiterated that the current economic downturn is deeper and more severe than those in recent history, adding that a turnaround is still uncertain.

The company's management and advisory fees were $344.6 million, up from $320.8 million in the first quarter of 2008 and down from $389.2 million in the fourth quarter of 2008. Fee earning assets under management were approximately flat at $92.2 billion versus $92.9 billion as on 31 March 2008 and up from $91 billion as on 31 December 2008.

However, on a capital and liquidity perspective, Blackstone remains well positioned with $776.3 million in available cash as on 31 March 2009, $400.1 million invested in liquid Blackstone Funds and $81.9 million in outstanding borrowings.

For the first quarter of 2009, total segment revenues were $48 million as compared to negative $621.4 million for the fourth quarter of 2008, and $32.3 million for the first quarter of 2008.

On a GAAP basis, net cash flows provided by operating activities was $555.9 million for the first quarter of 2009 as compared to $115.2 million for the first quarter of 2008.

The year-on-year change was driven by lower net depreciation of the underlying portfolio investments in the corporate private equity and marketable alternative asset management segments, and increased management and advisory fees in the real estate, financial advisory and corporate private equity and real estate segments.

These increases were partially offset by increased net depreciation of the underlying portfolio investments in the real estate segment.

Meanwhile, Standard and Poor's has assigned its stable outlook on the company because of Blackstone's lack of balance-sheet risk, the firm's success in recent fundraising efforts, and strong performance in many of its advisory businesses.

The rating agency, however, said an upgrade in outlook is unlikely in the current economic environment.