Blackstone Group (NYSE:BX) got investors fired up when it went public last year. The face of its Chairman Steve Schwarzman graced the pages of almost every "world's richest," "Wall Street's new leader," and "don't you wish you could eat $400 crabs" list, as if he were some sort of hybrid Warren Buffett/Paris Hilton/Croesus creation. Give the little guys a chance to get in on the private equity action, and, duh, of course they'll want to jump aboard.

Unfortunately for shareholders, the $400 crab dinners are nowhere to be found. Shares are down 47% since Blackstone's IPO. This shouldn't be too surprising, since the buyout market has dried up, leaving the mind-blowing deals with which private equity became synonymous nowhere to be seen.

But is there more going on here?

One for me, none for you
Blackstone reported second-quarter earnings earlier this week. Earnings for what the firm likes to call "economic net income" came in at nearly $100 million, or $0.15 per share -- not bad, all things considered. Unfortunately, economic income leaves out a few oh-so important details, one of which includes certain compensation charges for Blackstone's top brass.

Looking past this nonsensical calculation (if management compensation isn't an expense, what is it?), Blackstone's GAAP net income came in at a loss of $185.5 million on a 63% plunge in revenue, while compensation and benefit expenses ballooned nearly 200%. For the first six months of 2008, it lost more than $400 million on an 81% drop in revenue, while compensation expenses surged 372% from the year before. Adding to the misery, Blackstone states that these compensation charges are "likely to result in GAAP net losses for the next five years."

Now, I'm all for management making a fortune, provided the shareholders get paid first. Goldman Sachs (NYSE:GS) distributed a bonus pool of more than $600,000 per employee in 2007, but keep in mind that its net income was more than $11 billion. It's always important to remember for whom the employees work: the shareholders.

That's where things get interesting with Blackstone. Employees aren't necessarily focused on the shareholders; their primary concern is the fund investors whose money Blackstone invests, a process completely removed from the shares in which you and I can invest. The management fees and performance fees from these funds -- provided there are any -- get sent to the public shareholders. How have those funds done? Good luck finding out; we mere mortals aren't privileged to see such information. Absent any data on what's inside these funds, there's no telling what the future might bring.

Bottom line
I'm not calling these guys crooks, but it's undeniable that Blackstone management is getting a much better deal out of the IPO than ordinary shareholders. Shareholders of similar organizations, such as Fortress Investment Group (NYSE:FIG) and Och-Ziff Capital Management (NYSE:OZM), have been dealt similar hands, too.

So are alternative asset managers a sucker's bet for shareholders? Until either the compensation charges begin to ebb, or the mammoth buyouts make a comeback (fat chance), yes, they probably are.

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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. The Fool has a disclosure policy.