The US mortgage crisis is “deeper” and “scarier” than anyone expected, Tony James, president of Blackstone, said on Monday, as shares in the US private equity group fell on news that its revenues had fallen sharply below expectations in the third quarter.

Blackstone was hit hard by market turmoil, posting a net loss of $113m (€77m) that reflected both its disappointing revenues and an $802m non-cash charge related to its initial public offering.