Blackstone (BX) 26 Jan 232022 Q4 Earnings call transcript

Good day, and welcome, everyone, to the Blackstone Fourth Quarter and Full Year 2022 Investor Call.

During the presentation, your lines will remain on listen-only. [Operator Instructions] I'd like to advise all parties that this conference is being recorded.

And with that, let me hand it over to Weston Tucker, Head of Shareholder Relations. Weston, please go ahead.

Perfect. morning, to good conference fourth and call. Matt, and Blackstone's welcome quarter Thanks,

Steve CEO; our Chief Chairman President today which a Schwarzman, Joining are slide and and this we Operating presentation, and press release Earlier available and Officer; and Michael Officer. Chae, on Financial are morning, issued website. Chief Gray, Jon

We file XX-K our expect report to next month.

and actual and you include not duty forward-looking materially. are uncertain I'd may do may statements, control firm's from call like outside that to undertake the today's to results statements. remind We update differ of which any these

For risks refer the of on the please of results, a you'll certain some our discussion Factors XX-K. press release website. our of and of in to that could section reconciliations page Risk the the shareholders non-GAAP affect also We'll measures, see find

Also, nothing please without Blackstone to Blackstone to material is constitutes sell an an consent. an copyrighted a call fund. interest offer this offer be solicitation duplicated in may any not of audiocast purchase note or on This and that of

will of holders On per net February and the million. $XXX we of common $X.X income a $X.XX earnings GAAP of were declared record dividend results, as quarter Distributable billion which share, to for share, or we be X. reported paid per $X.XX of

that, call turn over the I'll now With to Steve.

the history. in global for tightening one Well, the market on morning, the generation. most highest thank Combat aggressive good you, world since call. the inflation Central crisis. financial cycles XXXX represented joining banks and the thanks, everybody, and challenging environment around of embarked in a Weston, most the

fell be down we not the largest as the rate rose since a for index, with the to start States, S&P from REIT XX markets saw basically XX%. the result sharply the forgotten, highest the In XX%, inflation funds public to at XX% level here in Equity X.X%, NASDAQ XXXX. down of year, year years. zero down increase Federal the of United

The high-yield their XX% more these the at record. the and extreme, the on down intra-year even high-grade portfolio years worst indices XX% declined and Overall, to XX% movements credit, XX:XX respectively. of one at In indices were lows. XX%,

dividend And backdrop, shareholders. $X.X debt for X% against both fee-related in to for the XXXX, our earnings year earnings, Distributable to the and this equity extremely earnings rose for and increased example, on $X.X Blackstone record growth in collapse delivered billion, market billion unfavorable firm metrics, despite while a markets. X%

substantial their billion, although fewer environment, to the of fourth firm's past we which securities which distinguished in Blackstone diversified limited has several compared a our generated grown over of investors to dramatically reflective between had the due partner's had managers XX% all money, realizations somewhere earnings and the of almost DE we capital. preserving Most The XX% itself power, typical $X.X quarter, partner liquid strong importantly, years. limited our differentiated highly The outcome. lost investor by the year

those elsewhere. credit flagship in were private Our real and losses X% estate, appreciated to while XX%, recurring secondary's strategies

every quarter Solutions composite the Fund X% of gross Hedge achieved positive returns Our of business year. return a with

private opportunities the only strategies liquid corporate between Our year down credit and equity, and were tactical X%. modestly X% for

losing the with a the principles component always involves on rigorously make. our founding necessary One XXXX opportunities money. our investments capital investment as Blackstone's preservation of clients' assess a since of in We of focus core not we

benchmarks returns course, public that time. significantly market over of addition, seek we exceed In

executed This that year, again we foundational we are this principle. proud on

to assets to largest in asset Our approach manager from the becoming XXXX, grow investing no has to in having enabled world the alternative us today.

just XX% record inflows in to assets As $XXX of XXXX, which $XXX our are drove you a us, billion. under rewarding remarkable expect, investors in would growth billion including management

managers alternative alternative investment. That this manager as the for all over qualify globally. But capital started alternatives the today continuing alone business, business others year XX robust increase almost investors top a institutional of of and provided allocations. inflows Blackstone remains Our XX,XXX as out to in are the institutions

channel, to as private high-quality well, of experience to this have trillion ago, offering investors new $XX of institutions. a money same where led raising offer alternatives products starting to the market benefits is share. wealth the generation a we Blackstone, by started by access largest we channel XX vast the years The we development in

approximately where decade the leading we invested private distribution built significantly wealth we which to sector, and XXX ago, interfacing a comprises dedicated with sales service globally, Over team, wealth largest a the in systems. our today establish people organization

This our ago, therefore, were we business. and capture we And is construction. longer designed portfolio essential liquidity, structured returns is have for of a for match to by premium worked And of much the of it these attractive principle our provide products customized individual liquidity exactly in time, products large-scale term is to over capital. assets the to first launched of foundational of products years these investments Six duration as which time to subject as limits investors. basis These with investing the provide intended. products the horizon

the wealth times. XX. a X% of three Blackstone's returns talk largest REIT over class, by about We've share BREIT, since has its product index. REITs. earning largest for net Been them three annually in years out-earned ago, delivered channel, public the inception lot times public private six

and XXXX, markets latest and X%, the while In data, higher public REITs melting. XX% performance. net that’s XXXX debt was income, growth return was equity available public net over through And in BREIT's some operating were its

the indices in exclusively Blackstone's this of yielding today, debts. significantly is credit net second XX% X% over rate in achieved floating product largest BCRED, area and outperforming has annually, returns relevant

the extremely not has channel billion, XXXX, private in been wealth remarkable a positive. the $XX The our our totaled performance what hearing to sales In you're response exactly in media.

$X headwinds, in net demand despite products. quarter of this in billion quarter, strategies. billion, fourth we other sales our robust for $X with repurchases, our saw including billion net the strong inflows positive drawdown $X basis, in the In and vehicles channel On fourth $X in were market perpetual our billion a after overall

Specifically, our the quarter strategies net $XXX outflows saw million. of perpetual moderate in approximately

a market We trajectory. otherwise believe strategies cycles. we're would long-term flows in growth impacted positive one are As seeing temporary very expect, in decline by an these

speaking, at years for surprised in and been for time focus in flows quite external a BREIT XX I'm on bond frankly the the by Firstly, markets. of I've over finance and intense cyclical stock lows

is high of all investments to that businesses, of that from in decline build us worth those types For expected would environment. and on what's going nearly create new should flows predictable. individuals be this It net highly

on for that leads the in appreciation five major bottoms products. experience navigated My regarding in of future just Having what's by focusing bottom trends public historically periods for trends. resumption is growth at my are constructed career, short and likely I've often cycles. learned This of a relatively well and time happening market followed market last the declines historic high-performing these of

won the month. all counting are the products. And X, won that is simply all four rather is long we're we and on know, World World the with term, who than Blackstone, has not of the to and our bulk focused not games working Series strikes, people as balls our win And all we to experience next our World At been that Series. vast remember are intention, Series, and

for decades we're experience channel with Our is of private built portfolio and and very been differentiated funds products that substantial, has and our highly bringing four nearly wealth performance. flows in the returns, consistent our high-quality performance very over The strong will are something on in need terms follow.

is relationship as investing beyond to hold. This California What million system good indicated that, invest our yesterday we've firms. contacted and world so individual month, they invested effective University with an XX-year institutions a BREIT and wanted for an investment most upon created is additional sophisticated of the in investors we between the of $X this well. us one announced which builds that the in billion $XXX six-year Earlier

period, powerful buying the its over This had Chief Blackstone. products best and estate meeting has he they represents and pleasure illustrates Officer BREIT portfolio the additional of consider holiday UC's from one also United the with I of real It and said portfolios the Investment in significant positioned firepower with flexibility, the of States. provides investment affirmation of advantages BREIT a substantial performance. and the

firm, the drive to the the individual other intellectual of our from an and funds many our our access possible advantages our of those get creativity just and leading manager, best relationships, come capital, that our Investors for these to benefits including not portfolio use full market outcomes capabilities We position. customers.

the Our their performance Blackstone's for in growth told to ultimately distribution cycle partners they've us channel we in commitment to wealth well, is area. our alternatives. and private they understand believe as significant ever. provide impetus stronger this And continue this to client's to will plan access than this expand

asset institutional media adverse concept individuals face benefit approach as adverse of the to the management disciplined of and in and returns applies Our well. are of our proof for markets

Blackstone challenges behalf XXXX, navigate as uniquely into of closing, In of investors. of all is our positioned we to today's on move world the

a portfolio As excellent shape when is on with upside downside ultimately as as whole, recover protection, well values emphasis this our asset an cycle. from in

investor opportunistically we buy low than dry scarce. assets world With powder, the billion and have of capital is other any $XXX more in almost almost liquidity financial are when to values

firm have to and growing the stronger, emerged cycles many always greater through lived heights. have We

model on market out don't the substantial and performance. Public historically, investors long-term our upon stock understand who missing Blackstone's risk

on prospects. that of is a equity. firm's XX% Blackstone's group I can you, own people tell Our this bullish is extremely our

turn that, with things And to Jon. I'll over

the everyone. The true measure value focus. investor to with of highlighted. we our our the markets, XXXX, generate along year Despite continued them. as Nearly success capital we've morning, Thank returns strategies all Steve outperformed for a of you, indices our creation Good we've for for tough very Steve. in The is clients. how result flagship positioned public relevant deliver

no net the We years. global economic you of There cycles XX real achieved opportunistic this funds annually the estate, past do It many matters and of returns interest better invest. the across where example we've rate where XX% market. is in than in own not our

inflation, could and life office, More rental strong centers. we help offset rising concerns around hotels our recently, concentrated where interest and logistics, growth these sectors in flow current XX% real rates headwinds, data our of portfolio cash over estate given housing, science including

in in Europe in across XX% XX% a the holdings, Fundamentals estate UK approximately recent remain were Blackstone, record the leases globally comprising overall; Australia XX% in expiring In increase of XX% and and the real accelerating is XX% the over, re-leasing largest roll as December, Canada. rents in approximately extraordinarily months, in US portfolio. XX% Logistics XXX% in exposure spreads, entire to strong. our

constrained most At now supply starts construction with already along of same for are estate time, which and is real pipeline. new the sharply, warehouses, tightening further types falling

assets secular been the down represent written only assets exacerbated equity not Of course, such dramatically example, real versus these office estate apply XXXX. challenges approximately exceptional our US of world. of fundamentals XX% value in traditional everywhere. US portfolio We've ago. global X% XX office, post-pandemic In And do have for since a fortunately, traditional years

energy results. private concentration in meaningful travel a had have equity, on crypto. in avoided did largely our In We unprofitable energy, the tech transition nothing leisure, and and impact areas our and

year-over-year equity operating private Our thematic approach QX for companies. led has in corporate XX% revenue to our growth

our billion returns of XX% total portfolio moved of Margins our as pricing corporate reflective in are high-quality to has businesses be investments with on non-insurance our AUM. focus And Over in which benefited our have $XXX credit with business, rate, of proven higher. floating power. rates resilient, nearly

to more macro investors decades, securities. us of for Finally, results our reinforces strength quant and outstanding the in we over and in yielding The emphasize serve BAM, Blackstone returns liquid allows areas. brand our investors in strategies

While seeing clients the the strategies, globally. are with greatest private challenging, a LPs fundraising in credit for today position We're including insurance for demand and infrastructure. remains differentiated environment from we

growth and $X area insurance over base is to bringing key rates our current recently deployment spreads. QX This $XXX clients insurance life favorable for the That's AUM of from with billion direct environment $X time have increases inflows company from Moreover, over Nippon announced we billion large alone. insurance capabilities, benefit and credit, our in help this in existing growth. to incremental platform, given is our leading billion robust accelerate the mandates, a clients for origination particular. Japan's leading to our In wider which commitment we investors in resolution company's differentiator significant from line Life, from to $XXX platform billion where includes the sight an of in

since just chose quarter XXXX, we in Performance billion in net raised infrastructure, with AUM the $XX bringing to In like including $XX billion $X has fourth it's and outstanding billion Again, and to invest, annually in returned transportation, about energy XX% been five years. inflation infrastructure. areas protected we digital, inception. where

flagship advancing toward amount to-date raise fund will we've new roughly equity billion private for $XX drawdown billion current vintage of believe Turning prior corporate $XXX $XXX we a billion approximately fund fundraising equity, on we've In difficult our in the raised to private for our business, flagships, as the and the over a closed target. similar environment.

we completed industry's SP's continuation strategy $XX at fund largest, the flagship well billion. as In at secondaries, as PE over $X.X for billion, fundraise GP-led SP's the

QX in We equity, also our aggregate. in credit and billion for and raised strategies additional transition-focused energy capital private $XX targeting over in renewables

In European vehicle, which for fund, which opportunistic a latest sized our billion debt start was we to this similar its we And later real will estate, we raising $X fundraising €X.X billion comparably commenced expect capital. be the predecessor. of our targeting size strategy, seventh believe prior to quarter, third-party to

particularly deploying our as challenging. the scale global As of with becomes fundraising, capital, reputation in are partner a world and choice advantages key when our

Climate was majority a QX in Technologies for Electric's segment. commitment largest stake Emerson in Our

billion at a the highlights remains dialogue, our Blackstone. source, investment a when ability very financing the investment. carve-out scale complex unavailable. transaction $XX such environment The were result This the traditional and at largely completed in of was finance best year-long difficult a partner a to time sources corporate of Emerson in structure

QX bilateral another partnership Benetton of Other of with companies a discussion family. the HCA, CoreTrust privatization with largest included the high-quality infrastructure corporate investments alongside in the in Atlantia, transportation and one

Sweden, interesting large-scale seeking opportunities Canada, from liquidity, volume emerge. UK will of estate for dislocation, logistics opportunities in a some see including in portfolios to it to funds take investments to from the starting the leading time We're market arise real but and

latest cycle $XXX positioned powder. fundraising billion dry very Our us with well of has

continue we space. global and the see alternatives In increase allocation to closing, to is leader the LPs their in Blackstone

annually earnings past more For XX shareholders, the our double the rate distributable XX% grown the years, firm represents exceptional market. value. We've of for than

over liabilities. XXX% count and earnings debt and no decade, continue while share and relationships and through customers has that stronger. Moreover, and done with the out have nearly an never is grown dividends model, paying of extraordinary business insurance We've that net to our operate we minimal buybacks. barely brand our been It with

With that, Michael. to I will turn over things

Thanks, Jon, in everyone. Firm's good strong markets. reflect morning, difficult results performance and

and financial Our inflows elements and terms then of outlook. investment business demonstrate returns, to earnings in fundamental review investment I'll and and key of resilience strength continues we'll results power. forward performance remarkable discuss first the

realizations earnings, year, a levels, and Despite growth all record backdrop, fee-related the highlighted. for challenging DE positive results. earnings, Starting with net as and Steve reaching full FRE saw distributable with meaningful the

a FRE management performance increased by billion $X.X share, X% per healthy to or powered expansion, revenues. and fees $X.XX very in fee-related strong notwithstanding in margin decline growth

fee for and Our a XX% year, drawdown year XXnd expansive Blackstone. straight lifted $X of growth the billion base breadth new of funds throughout of the management to quarter base engines the year-over-year at record and fees management growth the activation

in reflective the highest with At discipline time, the same calendar costs and the difficult a a XX ability of expanded to for FRE robust points year, to margin basis firm's margin position XX.X%, ever manage level environment.

billion strategies, the XX contribution strong vehicles. perpetual with year, driven $X.X were revenues from returns across performance by our Fee-related discrete for

forward, the moment. in high-quality which stream XXXX, for beyond is favorable, in I'll setup revenue discuss quite Looking and a further this

while a saw record in first second market slowed by was Distributable activity, realizations. market $X.XX of our We earnings increased year increase which, driven of pace certain overall growth the FRE, dependent. sales XXXX to along The common billion with course, half, of in the levels. per $X.X X% share, impacted the the net is in a by reflecting activity driven large in realizations X% realization by note, of shape or half

fee-related In five affected XXXX the of $X.XX in was or balance the firm's for the billion a quarters in quarter, schedule in throughout was revenues fourth The $X.X the to crystallization comparison FRE FRE BREIT's four the per XXXX. remained best year-over-year year, comprising earnings share. history. FRE change by performance for

excluding of Previously, year's the X%, quarterly the these was each the XXXX. year. first quarter quarter, crystallized positive in fourth with firm's moved a fourth in revenues more quarter full which FRE in growth the the revenues, to Notably, in line full crystallization

billion per in were in six back, realizations share, XXXX the backdrop for or Distributable $X.XX had for the for above above of year, times quarter. muted earnings quarter quarters, is share reflects year occurred our that from quarter our down $X.X power distributable every history. only earnings the past per well despite which the $X well three common prior consecutive previously This our of elevation underway. Stepping the of a were or record earnings much fourth

Turning volatile capital. to and along broadly. the in fourth with of travel-related with strength publics energy investment protected the quarter, corporate private funds appreciated market In Against our our XXXX, funds backdrop performance. equity X.X% the holdings our investor

are growth companies overall positioned and resilient portfolio revenue well strong with Our continued margins.

the across opportunistic the depreciated rising the capital, this year fourth in cap cost significant decline. flow driving our to In and In impact, saw appreciation estate holdings. we've of quarter the continued X.X% real Core+ real for full to to strategy funds of quarter. estate, across increase cash still our context the due X% robust the Notwithstanding assumptions portfolio, growth rate

Of in liquid income year-end, the generating sustained, meaningfully support strong moved X.X% which, if and appreciated credit, provide lower additional private strategy have yields strategies over resilient X%, appreciated since note, current time. In a portfolio, is of reflective BAAM, portfolios of XX-year credit the should quarter, valuation row are in external the against credit stable in the challenging the composite our return in well environment. a X.X% quarter. generally performing a performance. a operating for quarter backdrop XXth BPS the positive And was in Overall, gross

outlook. the to Turning

first, would we FRE, expect activity well. relates fundraising over led platform. remain cycle; material strategies; contractual contribution from our to we of step-up respect dedicated expect perpetual in market ultimately and when drawdown With near-term as insurance as And several given we third, second, sales reaccelerate realizations realizations, to largely to conditions. as the of by the muted stabilize, First, the it next a markets the substantial to expanding continue combination growth our always, years, to expect

of funds, of XXXX the terms and will holiday full the drawdown ended, nearly year include contribution estate global for management has real In fee flagship our a fees.

expect to subject effective followed We year, be investment by holiday. an to the corporate launch deployment fee later flagship will the PE which period four-month for this

depending launch will in coming other deployment. funds We quarters the various on

scale of grow In of year-end. vehicles target continue $XXX to our of fees Federal a earning billion and billion and today, BCRED, BPPE, $XXX combined total, four management grew strategies only XXXX over sets strategies $XX the number XX BREIT, our in higher a was substantially XX% This in revenues flagship for BIP, as fee entering year. to million. AUM discrete fee with baseline

fees, will subject XX NAV-based XXXX second the In benefit of the these year. times of continue revenues. effect fee-related the firm are noted revenues, platform more the four from over management vehicles to in has We previously and crystallization concentrated half perpetual addition of AUM layering the to generate to eligible performance BPP and XXXX to the that in

in of million from for Finally, ended the AUM revenue billion we generating large four $XXX $XXX our XXXX year. management fee of over clients, insurance, with

time, strong year. these billion both double and over $X including more to incremental revenues to existing than attractive As organically double-digit will these growth carry five grow revenues years, extensive this anticipate margins just in mandates by given our four mandates from These capabilities. contract, we fee approximately

strong in with in confidence So, and have to embedded XXXX expansion we drivers FRE multiple continued beyond. key summarize,

position in fundamental uncertainties of new we the from year strength. entered world, today's despite closing, a In the

power is forward, dramatically past elevated for the have confidence earnings looking great several future. years. Our the And in we

it up the you call to like With open now thank we'd for that, we questions. for and joining

coming America. question of [Operator Craig And first ahead. Siegenthaler the Instructions] Please you. go Bank Thank is with from

doing is Steve, morning everyone Good well. John. Hope

Good morning. Thanks.

to matching quarter What's inflation had up in I private AUM Infrastructure inflow? inflows every Infra? now, And And fundraising channel? Is is more the of So billion. improvement partly was $XX $XX the sizable pretty much been it is every driving momentum dollar at that think Is is also, generating it billion. around Partners qualities? PIF contribution still from wealth the

remarks, So, key saying performance was grown, Craig, drives inflows. I is reason what say in it's the his would echoing Steve

filing, attractive. So, much that if has and remarkable XX% a vehicle, delivered this for that's obviously lower five inception ago, so years our net since look you in a targeted really had fund return,

hit digital I went in in this in on which transportation you key of post there's protected what's Aviation long this Europe, element, very nature do given Atlantia where and going a here infrastructure, portfolio. in assets, infrastructure, the think in in owns investing has strong hard been on. transition, positive and What we fund, is the for very underlying States. pandemic, the Europe, centers pushing of particularly Signature energy an demand. United it inflation Autostrade area energy That then course, And really data are towers,

portfolio would here. And good inflationary in so, environment. want performance. really really allocated under has in And delivered customers hold find a exceptional it infrastructure say that to very attractive general, our and more investors to It's an are I

And one it's flows. so been one I product of everybody on think, up has so, caught the things that

phenomenal didn't grew be product much $XX Meanwhile, is exist to of think and XX%, performance, here's five ago, than is billion larger it delivering much, grow a today. that we'll years has I AUM,

private you the talked into not product so private Specifically, far wealth. on. we've really tapped channel that a wealth It's about

a our still certain And size agreement. they it to under to relates yes, matching us PIF, up at then, are our as partners

number in some also the We have co-investments.

exceptional, So say, we're has been Sean optimism here business who extraordinary. future. really And scratch, lot investors and about have there's response Klimczak, what this just from would the proud what I the done, capital. still some is built broadly from a that truly additional of has we've business But and runs of

Thank you, Jon.

Schorr ahead. next coming Please, with from Glenn our And Evercore. go question is

Hello. much. Thanks very

Hello.

assets the don't some do And in of a talking essential quarterly So, reality match there's perception the earlier with that. capital. I products or that ways think, its put it the Steve well when to about duration liquidity

and they protecting you're work Now, shareholders.

they hit line. the bottom I understand, So

company. now XX% flows is, about a while talking question to my channel So contributing XX% for experiencing private retail, we've the wealth for been and of the

client being the money platform, the client for curious to has client the experience, that's I'm end SA, evaluate how So and wait. you asking the the

do to I you of like still reinnovation is, the question so, quarter, more have of something do bigger And conversations. picture asked some in have but confidence we thee I that last XX%, need know, you that XX% product months wrapper?

on your that. to much. love get I'd so of So all mark-to-market Thanks,

Thanks, Glenn.

their I versus narrative. is, clients, we media think our the what's experience fascinating when talk to

heard So X they're is, has our pleased They're product market. public of clients as in that the rate from they quite pleased. what we've invested quite times the produced that return a REIT

at positive. So happened they look here is what's

clients financial some was years Our trade-off a was one, returns this advisers trade that and were understand from and semi-liquid that product, plus six that limitations there to for always, the higher here basic on day ago, liquidity liquidity.

be of who've expressed customers majority vast, some happy. quite there frankly, unhappiness. But Now, a vast are the may small our subset

to so back the is food, the through world now, not a many to we markets work of bad – Steve's think backlog outside And think will are tough restaurant as food flows serves weather the like showing we good. about great we're we this, still comments. the return. There going as that right and reverts, really up are And we the as is quite continue people redemptions, but see

we by XXXX of saw And a the way, in flows. cessation

the one are X-K we BREIT XX% covers week. over focused that. year, a What which snapshot on of full same-store size. a estimated look NOI are can was at is next they're focused our posted No portfolio saying yesterday, just What is for extraordinary what this flows the for this on flows. they're the time. People was that, of for and find I products taking fascinating You today, like

customer. To us, is what matters delivering

challenging do So I fundamentally, back believe, get through will period, people to we this as these come products.

day, BCRED, be about look time delivered could monthly. I products the delivered to as different promises but has normalizes, believe flows. there instance, end you at That's fundamentally the going the but created But performance. over not quarterly the as why on as liquidity to delivered versus does the It's certainly, happy. today, liquidity the will are these. customers designed. are strong the on We're world changing a features, it different had, we think I has at of anything talk these narrative, liquidity, product again begin the see tweaks for people to media It's

Thank you.

Michael coming Cyprys ahead. is from Morgan question next with The Please Stanley. go

Good Thanks. morning. Great.

years more did Just growth XX growth picture at your I the that products we not around and if a of bigger ago. of recent exist innovation. guess, look X in today years, are question many contributing or

XX might So, ultimately, the white how overall of look new And X innovate strategies you for to opportunities Blackstone if here? from about out opportunities, Blackstone the for can space years, new for just today? the you talk opportunity for next we over business set look of that see the and to some innovation different XXXX versus

So, there We're $XXX space. alternative I in industry. roughly over When it's the it of at is trillion enormous opportunity think aggregately, the about still bonds compares XX% $XX look and you industry. That to trillion. stocks

things, get other trillion. commercial up $XXX in throw real can estate, real to residential you you estate, If

At of So where Mike. private real sciences, returning I done as think highest what but seen, in growth there's grow, estate, life I equity, is are strategies as you've if sort job as return you seeing where the strategies room lot in about top investments great the we're the happen growth, private profiles think are pyramid. duration to very a not equity there, obviously of the strategies. we've a high lot of most think And will a growth a longer

very from directly a We is market, opportunity, like realizing lend help that. can a small think of very, with that borrowers it Blackstone. institutions private insurance are and percentage investors, now still investors because be very credit huge about big That a is they or companies individual or somebody to of today area we

reason that we us And grow. really returns. any serve and major now comes where we've originating enables more scale, platform are industry why but this Specifically, platform have to lot today four a credit, see I that people even the we cannot talked from we on that private have to favorable incremental continue about as an insurance, don't unique now return generate clients. can performance focused more

the equity that's And are started initially We I can area the in secondaries we I'm credit in certainly there's going couple an products estate, a seen, benefits to say opportunity. us. just space which can of where think, from rise real be bigger the think there's opportunity. Infrastructure, touched lot I alternative would attractive you've the market, Asia, I a global private the board, which which US that in in and which on, weeks, generally of across grow. a And yield for growth. global just a of

Even real business, plus our So we when out of tiny fraction we across estate, of look see we're engines that still core still growth. market. a lots of

firm, what a of so, built which wonderful is great And sauce the sort relationships up. we've people, but these these of special we have,

if you of time, billion I Nippon with we Life committed with happened at look period what's in the referenced. So transaction that did Regents, short a $X.X Cal

$X up. for plus scale just We of funds. and then of and the We've who a is at have big these investors talent some strategies number are us a it vehicles got lot goodwill. key to of And find pursue looking to billion commitments the various right to

again, optimism So high. remains our

something to then, the that's cycle versus is see talking their alternatives, about increasing differentiated what's last XXXX, different than XXXX in really continue performance. sentiment back actually very down because And investors interesting the the allocation sharp to clients are

Great. Thank you.

with The JPMorgan. one Worthington ahead. Ken from is go next coming Please,

this Good question. morning. the and BPP taking for Hi. the And outlook for dig product. into to growth thanks in Wanted

BREIT made UC customers from gotten arrangement you the and have with to of first, maybe reaction BPP? a So you

Maybe years there? of outlook Mileway very for BioMed, second, growth How's like growth been stalled BPP. for growth over strong changed the and recently has few more the has next as seems it even outside

the Mileway other those then And BPP? lastly, what you nature growth of BioMed adjacency look might see adjacencies And and opportunities like? in for do

you, Ken. few A things. Thank

world heard the and BREIT really from in institutional BPP, Regents haven't clients vis-à-vis We much the around our Cal investment.

I the liquidity dynamic, to there's recognize get a profile think where different given different need inflows in you in order redemptions done. new BPP, investors

this see People a the slowdown. vehicles do allocation constrained. wait to deceleration in is market is, of flows. Capital terms more of area, In dislocation of tends and during outlook, periods a want watch. to you these open-ended will see, happen you And what of in sort

past the It's as portfolios in funds to in in the clients quickly is come attractive. the in then into these happened the By period. the existing of you get open-ended out happened fact invested deploy XXXX, in can real XXXXs want XXXX the early way, institutional this, And estate capital that it's funds.

the I the won't grow near as we as infrastructure other of talking about. quickly here, this area would parts guess, in But term like firm, were

I In focused a an time. that's returns maximizing We're terms for vehicles, basis. large-scale perpetual on recapitalizations, We think very do on of our over more it customers. selective creating opportunity

platform. have which another mild BioMed, these number a logistics of We Logicor, way, large is

Interestingly, some have up $XX billion XX at different smaller BPP of more entities. than made is We vehicles.

quite of growth lot that grow I over the diversity a can the term, – think the class there's in little time. So a it's we will muted. think and customer significantly be area an in and near asset base here the more But

Thank Great. you.

Our next from is coming question O’Shea Finian with WFS.

insurance credit. relationships. Good had everyone. potential I you direct via morning. your the appreciate On the color private Hi, lending US on earlier

well you say as complex an into, grow fund talk can an a expansion or the evergreen for BDC class? efforts? complex. on that eye you if about broader continue to But can beyond the And that these, have course, asset institutional Of

institutional of there's lending direct US on lot think and Europe both We clients. the a with opportunity in

obviously has that out pointed individual space, rightfully You the been investors. successful serving in quite BCRED

of but is Some thing. insurance see the same this clients clients, institutional in the

about the did a attractive And if loan business, rates is private are with where Emerson, equity, their borrowed we at that over. climate If we think you return. were a transaction in and technology spreads one-third to value about there fees, XX-plus very base you look upfront and

clients, and seeing area to that we institutional I will to and would plan time. be think so large sovereign an SMAs. funds of we have And feature. that are It grow a wealth over pension like this, number is And funds another

that's think capital I to of today. capability, direct why much be grow it sort to access larger than which multiple is this has ways can lending

you. Thank

Brian And one the Bedell Deutsche Please ahead. Bank. is go coming next from with

Great. Thanks. Good morning, folks.

BREIT Just back BCRED. and on

to a – the want about near-term the in sort redeem were if on year the getting happier Just that investors, in through requests term getting of to I heavier of and happy think a to so folks through and are then those John, might intermediate obviously, – which, the any Asian the burning not redeemer speak. had ball, investors, last that, abate. when guess, just And redeemers you crystal getting thinking redemption you of sort

might redemption a there like you then and through net are get just more terms you in in you requests of opportunities if to And institutional when see? you investor would BREIT profile, and positive BCRED of the can Just think of those more sort also that burn positive profile. potential with differentiate

I months saying, number of for endured of as start bunch A really by a you questions Okay. guess I'd we negative press, know. of here.

takes so, time. rebuilding momentum And

good customers, those news tone I with talk distribution underlying advisers, if you financial our conversations partners, has the improved. think is, the of

many concerns, and lot to saw $X a It's lot. Cal billion that real originally, about addressed needed capital of yesterday. a discussion in another the Regents, as be There unfounded There's says $XXX which were million capital. from been we a lot affirmation. coming of a that of It

about Regents we look But did, on at what the downside Blackstone, when it not of Cal provided, really subsidy you X% was annually. BREIT a

so, performs get the for private that very valuation hoping for And they outside investors of And the advisers. of and wealth achieve. unless BREIT their don't then that of the they're to portfolio the and XX.XX% our was portfolio the customers individual important them, financial for and affirmation quality

see, wait more In out. some reach own. on and to reach happens do we that just front. of see And terms We'll We've this? would we a had number we'll some There's people we folks limit of, of had the what have out. but units

the need gives to well capital sharing. But like just we XX.XX%, X.X% order we above really perform historical about the in think gain. achieve of this product's lot return it to of we generate then previously. a really fee Blackstone terms a from -- incentive valuable And even We incremental returns perspective, below obviously, talked BREIT. in to product an we more get It transaction as gave because, can

a particularly helpful BREIT, very for and for So sense us, a certainly makes see of wait more. we terms we'll capital, in happens what lot but look this of that transaction at as the duration the of

and I redemptions then we're your are besides in out and BCRED, answer, seeing of say, should unfulfilled on I'd guess, it's November requests. sign question I other majority still December on there, the early, January, is improved tone, positive specifically the On the coming timing, from

us, to is encouraging. that, So

time, are expect your to and in point, larger than those work we to uplift be But investors outstanding achieve, they because in see because now they But we we expect redemptions. here think making cut an are January, able will be requests then, some backlog. down to actually to we'll because over want back, this

of timing easy. the Predicting is that not

strong that obviously momentum. continued think, I important, the continued performance from is from confidence and us community investment rebuilding

Regents time the I point, how a see it, I investment but we're Cal of think say this in and have plays important would put really at line I out. but wouldn't wait this going to terms psychological confidence, So was on from to

what were saw And back But gives in on permits and almost market. logistics we is rates BREIT. confidence rental November, the or a has headwind fact are the XX-year feel, fact we happening in that, has sectors, QX, the real the decline which in housing up cap place come in rents down. new major rents in that our The underlying treasury, and in what's us a below in our been portfolio now starts XX% XX% XX%,

investors our direction. about will So, I And better key, makes be think, to outlook. in feel us that that the moving get more

have headwind There's a sorry, net specifically, different. around Thank less flows. There's less the continued than these to obviously you BCRED positive there the for Oh, we estate. vehicles -- little credit. on around dynamic correction. have negativity is On real The

there's products negative benefit there, of Fed senior north XX%, pressure, And higher should rising XX% raises which we again, from less portfolio credit There's -- we've space around the rate, yielding rates. press XXX% floating go the as the the a rates. positioned secured and

think performance I dynamic will And again, more positive. is drive the think flows. So, there I

That’s Thank super helpful. you.

question next with from is Please The Sachs. Goldman Blostein coming ahead. Alex go

everybody. good for on Thanks zone your was question. secondaries the morning to business. in Hey I hoping

capital the and bit You fund. quite given obviously, be changes there latest are a activity potential could guys space, And significant of amount of raised LPs macro movements. for secondary in it feels the making like the

business, secondaries GP-led in velocity for that and out? does How capital as of to and shake So, about the mean LP you innovation franchise fundraising the What secondary within Blackstone? think for both additional product do you transactions. that maybe expect

years, Well, see we in grow and that talked down. see that what don't about. anchors industry alternatives grow has XX-plus now we've industry business We it secondaries our that been growth just the is to continue slowing for

sizable X% we've we liquidity. funds the tend industry you're discounts will What equity that's in about space, secondaries. growth want why seen And trades, investing dedicated of private times be of at of to and, have investors and infrastructure. real Today, also estate when course, is the there to but in course,

is or that well. in think And grow as from now that general asset a we investors, GP as can invest funds you scenario outside own, which they bit. out, popular pointed And like continuation, where very partners quite company bring an their new may and

into need alternatives. liquidity in coming is So, sort to its to that's the for this it that us can because be larger underlying much of and of business is the it feels than grow growth a like own industry the

here real our geographies And we're all competitive segments, a side I and I'm slow the expect will in across investing But do to one-stop scale sellers deal is ability the find that and half gives would year, -- the the we Alex, have you, we'll activity. be of X,XXX-plus buyers think equilibrium. in for advantage I us be funds that the the as back customer. big a a because a the with see to can in bit pickup shop all

has a to now be where Though large. So, nearly just should happens by inside it's to be growth there business. would Blackstone. over grown It area be itself, it This $XX quite another the billion real time. be

Thank you. Great.

Jefferies. coming from Please with go next question O'Hara Gerry is Our ahead

comments the of some believe where you Thanks. of heard you. Thank fundraising is sort of sort and you larger you like? of ahead some see sort vehicles? the what of XX to sort remaining target where looks on sort time what goal makeup I billion. with And of What the of just horizon I to of the specifically, clarify respect Great. Hoping are fundraising $XXX towards XX-month could you

of our target that sure we're put times. we about specific the two-thirds funds for so billion, Obviously, and now opportunistic global we of we're private had more secondary’s, than The made fundraises estate. a Well, is as been good at is we've and really talking of through focus you raising. the pointed said we on a $XXX And fundraising. sort equity thanks. of real Asian $XXX large progress I'm year. We've sort not lot vintage this. we billion way on estate, we're of a news out, What real

estate of we're a a which be new will $XX real the X billion, raising fund, talking chunk. meaningful balance fifth about the debt BREIT In

we're size capital fund We our kick more €X.X this opportunistic estate also time, we quarter, both energy, to to credit seventh going European green raised last and And get again. real a off target in similar then we're billion said, and to of equity. have third-party going

of XXXX, we We vintage their Life Science will at the point have some way launch smaller system. going to DSP work funds that are in then business. the And through our next some

but We're in But So in our in $X liquids. institutional Canada. the Middle you good across big large semi if big obviously East, the looked raised, us we've quarter, obviously, in our from US fund billion got funds. a we are in institutional as for news, funds, the clients. we're Interestingly, we I know, roughly And we've BXG, our And fourth investors breadth the in in growth insurance clients, bunch Europe, got out investors think, community, individual Asia. is the areas I everybody the going there. some drawdown drawdown focused on is in you think, other individual and

in that is raise have we us capital. this toolkit help tool our so just another to And

but than would a it environment acknowledge when certainly we is good feel it, started. So about tougher we I

Thank you. Great.

from coming question next ahead. is our Adam go Beatty UBS. from Please And

good you, and morning. Thank

Just a follow-up on BPP.

or You bit commitments term. slowing about talked the medium near of a little kind in new

ability does and maybe were collect the those existing all, might now if channel at all buy liquidity clients requests, in the just terms requests your in you. redemption to the of be elevated some performance that, on Also or to or driven redemption future that elevated either reallocation. other wondering at in to whether that retail Thank that extent be by impact are Just fees? as

Yeah.

about, on it's of It's of believe, of I which as lot redemptions. So are majority, $XX a up open not BPP, The vehicles. on talked today billion. made we

aggregate. in have We

that's the X% talked number platform. about than earlier, private that new we that very And expectations But different in outstanding across requests institutional redemption is about the as think I understand liquidity investors channel. inflows. entire importantly, from wealth the comes

same. estate less than may They're in geographies is, answer Core+ it's I be a in we the way that's the all of maybe variety short for environment different interest, why instance, vehicles. of I of dynamic. just flows yes, in more a And not so in And think There reasons some talked expect for of we'll this it the Asia real about sectors. see these or earlier other kind other

growth the you an is said, position expect the this as in if at But the the feel quite net it will growth, we be good. where aggregately, we portfolio, I near-term look far But because I muted. more area,

office in we've logistics, So you XX% look this this that's portfolio. science of think at over like if you we've buildings, net delivered that something – When got life like platform BPP, look something at residential, time. I XX% across

And are so will But I think now, that, again, headwinds space. be key in there determinant. that some the near-term right

Thank you. helpful. Very

from Our is ahead. next Autonomous question Please Research. coming Patrick go Davitt with

know more And on as demand asset us have update commitment LP, any Hi, good process evolved fundraising in any broadly, classes morning the PE seeing like, is you're specifically, or signs I that how in shift restarted the LP early, positively you January. starting clear? negatively? institutional Could obviously, that any for we More but it's backup discussions everyone. frame could how you meaningful then to and --

for would strong. I this; our say alternatives the very remains desire

allocation the US, funds legislature Here for the in York State, one-third. here the three New actually roughly increased by pension big the

and with publicly weeks a I meeting some They talk to CIOs to insurance was wanting couple of wanted in You've other increase allocation heard alternatives. large more companies institutional investors. Europe in ago about alternatives some

it to clients. allocation say I some is And today some of certainly There overseas currency that's specifically harder over shift. bit with area, a there little a would US investors. related are are constraints made for There in headwinds the PE a little

private credit considered is think today. more attractive I

we lot considered is see of about so earlier that And a moving attractive, we talked in secondary. that Infrastructure direction. quite people

say real a of both would with global estate, very our do we'll fund, our had we've European good and as And to course, response well. opportunistic I fine I expect product

us. is but alternatives, of travel for these and and think flow, I more ebb path for the the things that's tend obviously and industry So positive positive towards to overall

Thanks.

question Next please.

go is Ben one next ahead. coming Budish with The Barclays. Please from

Hi. profile. taking to I about for Thanks question. ask the margin so wanted much my FRE

You in nicely expectations up pretty beat consensus the the quarter.

the fiscal Just you've step-up kind thinking a years, next indicated sizable over about in few XXXX of in FRE. and

high You indicated very business scale. turns to

share could FRE around grow of fiscal how XXXX Thanks. couple should you the over years? thoughts Just expectation wondering, for it your margin next and if

of I evident. think degree we level as in obviously respect don't the feel Sure, -- know, But is time sustained Ben. I look, over on our you of mean, general, of targets I think high think, give to short-term. big with structure. control the we substantively, margin like a discipline pick our have do I track record and expansion, spot appropriate cost in guidance every an And we

sort about of would in over OpEx I the kind lot of for we for also that difficult see in I did comparisons. rate expansion next stability course the the you And margin sort potential of the a year-over-year resumption In OpEx, the would talked just and outlook, the we other year. in remain terms flattening in say over see of year growth second a the did of of of near-term confident the you in and XXXX half continued time. highlight, T&E

in what sort easier. And be the say so quarters three I I of year-over-year XXXX, last in will comparison think year, of the that even would is especially

just stability about and putting without would and targets, the over giving without I for margin time expansion good So possibility potential frame. say, we time in feel specific general, an continued exact

you Okay. so Thank Great. much.

Our Brian next McKenna Securities. coming Please go JMP is ahead. question from with

Thanks. Good morning everyone.

with a your A billion $XXX and to dry strategies. lot across drawdown traditional great markets dislocation within the in of powder. So capital capital deploy funds this you're of clearly sits into position

we should about retail how So moving think activity some forward for of deployment products? your

There's that. Well, start this why the potential for the to the large though retail will It levels, was capital the activity doing think Obviously, products, be us of one slug overall gives flows. can is related some of reasons this getting of a if we assets, institutional get I helpful. to course, you And flows and BCRED. time, because net a think buy we it BREIT new into prices in flows, the attractive is of cases, correlation, good dislocation. at because

world and will that's think to today, thing. be back we would allow that's here, private deploy over a channels So we I more the favorable that in us comes these how think capital that capital, wealth time, as see why very

Thank you.

in are no the questions there And queue. further

for Weston me So over closing Tucker hand let it remarks. to back

call. Great. look Thank to you, after everyone, joining today forward us and for following up the