NEW YORK (Bloomberg) — Blackstone Group LP, manager of the world's largest private-equity fund, said second-quarter earnings more than tripled as revenue increased during a record year for leveraged buyouts.

Net income was $774 million compared with $224 million a year earlier, New York-based Blackstone said in its first report as a public company. Profit excluding some compensation costs rose to 46 cents a share from 11 cents, exceeding the 34-cent estimate expected by analysts surveyed by Bloomberg.

The firm, founded in 1985 by Stephen Schwarzman and Peter G. Peterson, more than tripled revenue in its main private-equity business. While the early part of the period was "fundamentally positive," concern over the US housing market and the volume of debt waiting to be financed for LBOs created "more challenging financing conditions" that are continuing, Blackstone said in the statement.

"The market's realizing that private equity, and Blackstone, aren't going away," Paul Schaye, managing partner of Chestnut Hill Partners in New York, said today. "We're seeing a tightening of the debt markets, but these are smart guys." His firm helps buyout firms find deals.

The stock climbed 43 cents, or 1.7 percent, to $25.71 at 4:02 p.m. in New York Stock Exchange yesterday after rising as much as 7.8 percent earlier. Before yesterday, the stock had dropped 18 percent from the $31 offering price. Schwarzman and Peterson stood to collect a combined $2.33 billion from the IPO, according to a June filing. Schwarzman made $398.3 million last year, and Peterson earned $212.9 million.

Firms including Blackstone have announced a record $716.7 billion in private-equity transactions so far this year, according to data compiled by Bloomberg, though the pace of deals slowed by a third in July from June. Blackstone on July 3 said it had agreed to buy Hilton Hotels Corp., the second-biggest US hotel chain, for $20 billion.

Blackstone operating chief Tony James said on a conference call the Hilton transaction is on schedule and financing is in place. He acknowledged that more "mega-deals" are less likely because banks are reducing risk and favoring business with their "biggest" clients, an advantage for Blackstone.

"Setting up new deals in this environment is clearly harder," James said, noting the US economy hasn't slowed noticeably.