Blackstone (BX) 20 Apr 232023 Q1 Earnings call transcript

Good day and welcome to the Blackstone First Quarter 2023 Investor Call. Today's conference is being recorded. At this time, all participants are in a listen-only mode. [Operator Instructions]

At this time, I'd like to turn the conference over to Weston Tucker, Head of Shareholder Relations. ahead. go Please

and quarter Katie, and to welcome Great. call. good first conference Blackstone's Thanks, morning

Joining Schwarzman, Chae, are Chief today Steve Operating President Jon Officer; and Gray, and Michael Chief Officer. Chairman Financial and CEO;

morning, are on which this slide available we release our press Earlier and a presentation, website. issued

may few firm's uncertain today's from expect include call differ a report forward-looking to control and to like statements, XX-Q our I'd We are outside may the of remind and file which materially. results in weeks. you actual that

do undertake We not update any these duty statements. to

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

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

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

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

you and joining Weston, and our thank good for Thanks, morning call.

growing conditions First recession. quarter of XXXX tightening period concerns of and a for represented financial a turbulent markets,

XX% activity handful The of down US levels. companies. and While the remains markets tech was a was the S&P XXX XX% were activity large for down IPOs recent XX% quarter just posted gains the muted. peak to M&A in in flat year-over-year. median that Capital Meanwhile, from stock the concentrated

points has one by XXX the just representing XXXX. largest increased rate the funds the Fed Fed since increase in inflation, year, Combat basis

economy, campaign European US More pensions unintended along banking not saw tightening there led in in which challenges significant the investors, and consequences recently distress UK last this has summer. with to for the real we While is widespread with systems.

again once stability strength Blackstone. challenges the highlighted exceptional and of These

in Our have profile us. sheet clients fallen counterparties We don't highly and combination learned balance of mismatch safety and to with into liabilities. that trouble risk of a due is operate financial assets a firms leveraged of have an dealing with inherent always almost the and there the

we Blackstone, We're manager have of capital vehicles. light of neither. across third-party segregated At hundreds asset an distributed investment

and align Our The no or time investments in deposits. perpetual to that which is strategies. contracts don't debt insurance to deposits. We AUM long-term the difficult in of seek of our with firm horizon vast the forced take of minimal the has I'll again. In capital not liabilities. duration our markets. we net under funds, We don't majority us be one say take sellers positions

term vehicle invests repurchases prepared has for for potential longer conditions, This order over our as BREIT, outperformance can as well, assets. semi-liquid be continue it is deliver level long-term done the strong to of creating safety in that a it at so true historically. to of which in such adverse market formation with We XXXX in designed its this as vehicles predetermined limits

The extends we the of safety way Blackstone's to invest. approach

core our One losing our values of is money. customers avoid to

Of time. over significantly course, seek outperform also we to benchmarks

at of investment launched history, XX gains in lives environments $XXX of all drawdown we approximately for most of comprising which nearly generated We've knows some everyone investors funds during them billion these almost adverse funds. point the As have. our commitments, XX% aggregate despite

in where prospect designed Gretzky, ahead into and consistency what's the you firm judgment. puck hockey quote rigorous a often an an skate and going, process paraphrase us the We And the position of minimize we how our changing Wayne committee attributed investment to to where of to To it inform ensure insights reach is. which is our great the losses economy, with real the portfolio have of not conditions. give global scale to have risk evaluating happening extremely for and framework deep to

Blackstone, by follow At same media we area recently. an focus the external the investors and approach. estate, of heightened In real

realized This in in Our assets put we business which of right market. a our capital the years, funds. saw than the experienced over place only contrast, exit the or More that X% period has during vintage and financial remarkable truly structures. doubling includes most a investor collapse capital in XX competitors losses equity In crisis, bought of global result. right the

the We US will again, in Jon estate have these cycle the been have negative, and emerged real market. investor largely as in in to a toward outcome. quite of more due and to this unable crisis that from constrained environment. owners the has capital assets be pressures, may of all-time on sentiment believe TV levels, similar many financing stronger Today, Vacancies reached offices today extend office high a explained

time that of estate the We from At at Blackstone, done our estate which the now XXXX. US from sectors job the than of remarkable today. we a XX% X% have zero team in Having portfolio XX% up minimal to holdings equity reduced construction. instead has emphasize of comprises XXXX. Less over exposure logistics, in portfolio very well, including office. are IPO of real our portfolio, doing A traditional real

finest of would call Blackstone's it In I fact, work. some

in headwinds. cash for growth flows, in positioning the X% an example, quarter, that first to is year-over-year continues estimated BREIT, despite generate the Our strong up reason market

to our this being a our they We rates history. Jon yields interest experience as Blackstone. opportunity investor have investors higher this led a result much have for higher on significantly differentiated area. expect expand highly and throughout available to have as credit, capital In allocated will to more

an of the estate, focus Blackstone's real higher economic over on turndown. downside. as business, potential long with Simultaneously, an market credit increased delivered returns is time defaults the for excess protecting there we've while in periods

of investors new and we this should largest loans our rate are This example, standard care is asset world. have comfort X%. of leveraged annual class. our For US to default in the the than to historic And in manager provide the less record who

deposits the capital This economy outside funding in rather risk sector banking funds with extension instant liquidity. disperses makes on reliant that which a demand safer credit raised challenging times. backstop also the government to system and supports discreet typically is in long-term the Private credit model approach than

limited capital allocate world Our even as which recognized to institution, Blackstone, their more the partners a complex. becomes safe

heightened opportunity us. fact banking credit, In along that the especially time is to put of so. with has We've learned world. a work off stress diminished led negative. the to availability Recent sentiment money for which additional provide negativity, risk becomes best in in should to of levels system When

capital credit firm's the both scale, in Given available equity and areas.

have Dow $XXX ahead powder of a be for multiple their believe share we unprecedented of companies Earlier billion LPs entrusted rules Overall, the historic an opportunity One classes. with updated dry eligibility with this deployment. what our Jones to S&P include for note flagship us indices once week, me. final could again for

which in development period cap, in today. engaged universe market important S&P the consultation follows broad a company This of by is not the Blackstone market they constituents. a XXX included far largest by

that are development inclusion, We the positive which our this very hopeful paves would for way our be shareholders. for

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

underpin than confidence. of proposition everyone. ever. for Thank Good value that this the the stronger and key Blackstone's environment, elements challenges is shareholders I'll customers Despite you, discuss the morning, current Steve.

Michael more performance delivered most what success annually important allows it volatile We've credit. attract and highly discuss. nearly determinant differentiated, returns the investment opportunities secondaries, First, corporate is our is as for of real to us capital. will market against four has in This in protected opportunistic which net private tactical and our been XX% QX, our XX% backdrop, remains and estate the funds equity, in XX% capital In investor decades.

Over the months, nearly all past the meaningfully indices. our flagship outperform public strategies relevant XX again

and returns well positioned we are deployed for result direct the the Second, our way the current strong very we've are of where capital environment.

before, matters. you said where we've As invest

is including compared estate in data where office. in more areas massive these than Nowhere and performance is to parts divergence life seeing logistics, hotels, real science housing, portfolio more conviction the challenged real of our centers in of that rental market. the sectors, We're a in high apparent XX% estate,

firm in in we while in the generally rates. portfolio estate the the In at In in U.K. rents double-digit housing, approximately largest largest rental for States, XXX% real at same is the portfolio. warehouse estate estimate Canada, are mark-to-market second our the XX% at the growing United overall, market logistics, exposure concentration our time XX% rents and the real and our in

US our in growth that's moderated still seeing of approximately buildings, have but spreads releasing cash and apartment Rents we're materially flow X% higher.

construction pullback types regional of While showing housing pipeline portion banks further of real our assets intensify same At new capital greater to provide likely and the in estate, time, is markets constraining strength. US which supply most student is as meaningful for lending. are the the a even other

for This estate real positive over time. is quite

ten-year most important single level supply from estate demand is the for Aside the the of valuations dynamics, the driver real treasury.

with been have ten-year yield estate significant last a valuations year. for a recently, While equity. high XX headwind we've reversal private real the rates its basis from corporate rising points In down seen

strong companies that are remains while indications banking QX, weight a continued peaked emphasis and we're cost economy operating the We showing momentum. Meanwhile, resilient. our of anticipate system. leisure travel, pressure deceleration given have Revenues do on transition and energy in on the reflecting grew Our timely the actions seeing XX% companies. Fed's pressures the broader

overall an positioned environment. are such company's well navigate to Our

grade and fundamentals of a non-insurance X% less floating with In of our rate non-investment XX% than rate loans. credit, our across over portfolio is remain default healthy

and broader positive less Finally, than BAAM's strategies drive in and volatility structured credit QX performance markets. once weightings with helped quant much again

the last basis markets. plus investment XXXX leadership beaten has brought by two typical In Remarkable team, outperformance new a BAAM XX-XX portfolio in we the liquid nearly in points. years since

Third, of with XX us in the environment capital. including $XX more quarter first firm breadth are fundraising scale capital, challenging, continue our more raise become to and our over allows $XXX of entrusting last billion the over billion customers but as performance, us the a months. to The has result our

We're seeing estate solutions regional accounted credit, credit QX. rates and golden with in wider teams, solutions, moment the our which credit private insurance inflows for in for interest Coupled and bank spreads. the given This real for firm's higher today activity. a is of pullback the XX% greatest

us clients base of strong of additional billion expect the insurance of year. $X billion pace them to major the now repositioning throughout In and external asset and $X the raise the case their in first committed resolution, four underway. inflows is is a we fund fully allocated Our quarter, the an from

direct vintage. billion launched our for a billion insurance clients, $X lending We've institutional billion oriented to cap $X targeting energy expect in for this private and vehicle hit raised for QX and $XX product green the US June. also to new in both We nearly date first credit

so April on at Xst billion subscriptions BCRED's real reached has momentum far $XXX new monthly highest million. and nearly vehicle in since of commitments $X.X initial strong their estate October Our with private wealth level debt

in a and constraints, seeing we environment improvement of like extremely lenders for direct in one we favourable outflows experienced to As private world growing utilising insurance More home lending at of as partner an banks opportunities largest broadly, the deployment. equipment finance. of see auto finance, areas are scale, with this them capital regional as capital real-time our deposits,

and private from to We insurance significantly credit expect grow here.

overall peak. from the We're University against Moving private wealth first in to XX% to $X.X compared with requests BREIT's difficult raised We in including March our the billion which of had in California. January a quarter stabilization a billion the channel, seeing backdrop. repurchase solid trends down platform, $X.X

performance it We depends channel and market in given recedes, of of once conditions. volatility our the term confident on re-acceleration exceptional this growth obviously the in products. the positioning But near in remain

a business, fund drawdown reached final our ago, estate for held close flagship, our which billion. to real weeks $XX.X the few global we Turning

The private equity estate fund raised. largest equity or private real ever

fundraising of also billion was of the which for a next first strategy, similar targeting fund, close European third-party this We as vintage amount summer. prior capital, a with EURX.X the our commenced expected

environment equity, In second with raised additional latest target, date. XX% substantially to size the billion target we've we a remained we $XXX closings with to are continue to as affirming billion for The difficult, expected date our but similar Overall, of has corporate private the flagship, raised prior vehicle in approximately our $XX.X quarter. fund.

Fourth, has environment. year. having positioned We the this current fundraising us by achieved next very for anticipate latest our well cycle early substantially

companies billion events software $XXX nearly otherwise have public powder a leading logistics including UK. two of advantage the an provider to REIT did quarter, stock in to markets under a We of pressure, deployment in dislocation. and of dry take management muted we With agree privatize

solar push into Invenergy. with a infrastructure acquire space our energy continued assets portfolio also transition to portfolio wind We and commitment a our the through of company

to true our and our remain we strategy, track brand relying light asset Finally, to record grow. people heavy on

liabilities. We and with continue net to operate debt no minimal insurance

paid have we've buybacks. XXX% through out $XX years, earnings dividends distributable five of Over past the billion generated of and these and earnings

AUM few over investors. share a despite than Our in such count remained friendly There returning shareholder world has to doubling. with capital period the approach to firms are more flat this

valuable this. investors our Our on with and remain time lightning quick in light the unleveraged as do we us assets capital challenges, despite like and is a near-term especially patient model In being market's our focused closing, to long-term opportunities allows model both. emerge existing

will I things to that, Michael. With turn over

morning, Firm's and steady operating everyone. performance good against challenging Jon, a quarter reflected Thanks, results environment. first external

protected Our in we expand of multiple capital the foundation funds markets earnings drivers power continue the volatile firm's and to of across growth.

X% last billion brand to $XXX these inflows across of results. of power and the AUM with months. breadth management discuss The of rose continued billion, areas year-over-year in momentum inflows, the led of I'll Total XX strong Starting our over with detail. more each $XXX our and unique AUM platform fees. have to

in and The QX, X%, the declined REIT was S&P through XX% XX%. is earning increased up of $X.X a This consecutive XXrd index year-over-year X% fees growth. management period record the nearly AUM year-over-year driving XXX also base which quarter billion marking in to public a down the

share this billion we were affected strong in the revenues. fee $X.XX year-over-year expect FRE and fees accelerate by or growth in in a the QX earnings $X supported of these decline was comparison related with half management quarter firm's performance The to previously, stable Fee the the position. related revenues We highlighted in year. second by margin per

Net earnings last as of per from realization the market quarter margin the declined difficult QX. Distributable were managing comparable on year entering pipeline firm's expanded basis expenses environment. FRE $X.X to margins, or share, stable first billion in collective had period year-over-year a focus XX.X% prior the the months of to $X.XX year's XX XXXX. the realizations the with again, turbulence reducing respect points XX trailing With disciplined largely in for effect

public SVB of a level portfolio the the three has window headwinds, quarter, these been that again billion of of we of market advantage quarters, exceeded in of DEs generate at QX, seven at before for a liquidity approximately to in equity of stock turbulence Notwithstanding ability firm's a during per sell in $X companies an power of related to favourable or straight $X elevation the now share realizations underway took times. across investor aggregate the multiple private approximately illustrates met Terms number Blackstone. capital earnings

we in included The vehicle from Sona money. to the gains full prior components our LPs provider. a billion on we of exit our parts Comstar, company and traditional transformed times stake sales of $X.X supplier this sales, XX auto electric India's generated largest Including investment

building In our likely While revenue benefit to near challenged wait to we performance for firm's long-term environment the fund We to for grow. conditions is to the us market potential meantime, can remain allow the in term, patients. on while of realization continues focus improve. value structures the

Net a accrued billion billion ground the store of eligible $X.XX at value $X.X quarter-end. firm's the in to from receivable performance still stands $XXX years. or realizations. record last year, the QX tripled up balance is years nearly and is sheet, The revenue due at two per down level three revenue has AUM well nearly Performance in in of share XX% in on primarily

for drawdown realizations. an $XX stock positioned public private well ultimately billion stabilize, hold acceleration equity in and estate we are of markets When real funds. We our in

performance. Turning to investment

And strong First revenue and quarter overall corporate margins. appreciated reporting our equity resilient growth funds X.X%. private portfolio companies

BREP were in X.X%. funds largely quarter, the the real depreciated opportunistic In estate, the stable while coreplus funds

reduced our a portfolio, remaining in had quarters. in of We office traditional sharp QX flow of which terms our by cash we over are seeing in period multiple already sustained write-downs sectors key offset significantly in strength growth

BREIT's shares Class reported modest return a net X.X%. of coreplus, negative I Within

dramatic rate positive However, in in rates. year's BREIT's cost ten-year return hedge hedge, a generated gains the interest in was interest investors The its for last low has of which X.X%, rate the overall rise locking was excluding effect of the ahead Treasury by fixed impacted yield. debt substantial decline

the appreciated liquid nearly a and BREIT net portfolio reflective XX% private approximately the current X% of REIT attractive income. in quarter, per strategies inception, has delivered the healthy credit of In year, respectively index. three credit, Since first public returns and X.X% times or generating

BPS the in XXth a row quarter X.X% BAAM, of QX. gross return in The positive performance. And composite was in

expansion to Moving firm's drivers. in we multiyear the power with outlook, confident the the FRE and growth embedded of remain highly earnings several

months. First, in we across target toward our XX our drawdown continue fund business, billion to $XXX advance

to BCRED expand capital XX% BIP infrastructure billion, AUM up Second, year-over-year including perpetual than with more platform and to XX% continues in strategies. growth $XXX our

billion by nearly of clients. AUM insurance substantial, billion, ahead. clients. we insurance area, billion in our major $XX $X expect sequentially from XXXX largely reached $XX dedicated $XXX platform anticipate to driven our inflows for total, from for We from Third, the growth in billion up the our contractual these QX, in robust has inflows platform years

has us of firm the multiple engines summarize, very future Blackstone. To the forward. we closing, about momentum are optimistic In significant driving of

in is protect totally for investment ever have difficult delivering Our designed business firepower us and than we times investors. model our to We focused on remain before. greater

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

Glenn our [Operator question take with Evercore. Thank you. Instructions] from We'll first Schorr

much. very Hi. Thanks

believe indicators you get Are know of you there I'm happen. know or almost to sitting that? color more spreads will eventually near that ahead an term? thereabouts, XXX thing? the is a lot. closing the any at are to the Thanks. But XX% to I it billion. see environment And funding in it's ask us it's be you coming you're So would give Just I bid looking comments in going it's a curious what on environment attractive AUM, of any that both for on, that curious, said what mentioned leading we deployment. confidence

good Glenn, I it's question. a think,

all. one fits is size I think answer the not

I think will insurance accelerate. the our see credit we because the In of secondaries activity system, there transaction up. think, I there deployment tightness side private begun more on see what should because in to we've the is activity banking pick business,

in that In first up. was fact, quarter, the

highest fourth since the of level the think, 'XX. I quarter

in equity, who more There seeing estate sort are folks be think below confidence markets, some need equity, take a target we little a a looking of So to levels. for little are bit things do allocation liquidity time. for private to their private real I tends more get of little sort a stability. of for those

And a does A sentiment it tie to in while I of little that obviously, overall, think the down. inflation making. lot be will as comes

that's give to think important concerned I are to about very doesn't concerned indicator a the lead banking and system. people of transaction a about that confidence. to a lot markets now, tend activity. slowdown, Right They're

So I any will in will thing it always does. it's today. different as happen, one think waves sit point happen But It ultimately hard to to segments. it in we here

Okay. Thanks.

Bank We'll America. you. our take Craig of question with Thank Siegenthaler from next

you're Thank Steve, you. Good well. morning, both Jon, Hope doing

Thanks.

on channel quarter. XX of flows So real the X billion drove looks if quarter total SMAs in about probably about of estate this or like it the plus billion the you add net a debt credit, insurance the contribution

year markets I'm here, the did I insurance wondering, next then on generate in flows to channels flows ability So from get over that then the your and this institutional thought before the perspective we And outsized and retail see extending recover wanted reaccelerate? we channel's right?

billion, you're the insurance. but So $X I is from over little Craig, number close, a think

And outlook lot the grow & inflows as have. large with Corebridge. pointed our in nice are gives the Michael a of of the clients, We're clients. from strong starting as contractual to relationships confidence notably the at about major business. I from us just thing partnership think There ramp they Fidelity these of all we we up their that is Guaranty with out, flows resolution insurance, have terms

larger targeted who are I think there cycle. more in see able And we asset-backed four. a the what bit they're get to now space in a creates then, as episodic We potential a additionally some of have are in direct it do we we're course, to SMAs and there of moments lending, virtuous areas looking corporate areas find and like the others where customer. scale, finance, do

as well, Everlake former Life Allstate Retirement and platform. have also the We

think basically growth to its $XXX this So got I us own. billion will grow We've multiple we've and continue take up on got to engines. over contractual that time

beauty new with Our and we're clients insurance we companies business. I we're can of large-scale think which company, do. is other things an we to And SMA could in really really model, clients. not the institutional like globe and our We've these opportunities an so got insurance that's find multiple serve asset then can the just our around manager, clients do strategic we find

level high. our around the So area I say remains insurance would confidence extremely

next our take Adam with question We'll from UBS. Beatty

and you Thank good morning.

credit. which to source or on syndicated Just been the private has periods. private stuck weak I attractive. want totally up recent been on wanted follow Very interesting opportunity your even to and fairly another thoughts over lending in that's credit, get of

environment? you a So in recovery Thanks. credit how trajectory of And at that the there you kind do would see the part growth Is of offering affect see that for there? the Blackstone? private

challenges are lot lending So system. syndicated its market, volatility of the in that there's the a

if So of you in given you're trying generally a today non-investment right, bank to I XXX out sell say you're points. need hey, to XXX the a business, to commit corporate be going equity to credit, pricing. look, a private But basis to deal, that flex lot borrower, moving the I down. need point, a the pricing and you're grade to in gap the basis you're volatility, the able

will more hard this a equity borrower become as and of prefer our volatility have some on things it we a there's certainty. point, competitive. down we'd basis when know where do At And direct putting to we of that and volatility private syndicated the makes on come will course, market kind cap,

over time. public think share originated private continue they competitive where a period I direct a business more in have lasts to lenders I make gain to long got advantage to newly you've structurally they're a because on storage of think deals for will that commitment the do But time, and a

there's who borrower in established, the syndicated take credit an of risk. bunch advantages. a intermediary The market is to marketplace a a has once of is near-term has lot not competitive think I

think I I of more But and both direct think in to more origination coexist. So will market, that lenders. move they the new

Great perspective. appreciate that. I

Yeah. would the point big lender leading and just both. in in direct the leading And CLOs as players I investor We're we're we're out, well.

Sorry, go ahead.

enough. Yeah. Yeah. Fair Excellent.

to with next Stanley. go Morgan Cyprys Mike We'll

Good Great. morning. Thank you.

a performance. question question could hear harnessing of private out And on markets the what strong ability also generated would of versus ability you you your investment just artificial to for the look just intelligence? steps returns the Blackstone's excess I'm is and has the direct also take scope historically, there over Blackstone So very but deliver perspective overall returns you sort excess markets. to next your around and decade, over more to as curious and industry's is and ability to with opportunities return, as such enhance are on origination less, outperformance environment generate what say the some public

durable sector this now, selection, capital have say been And at would these advantages we've companies. in our plus last to continued decisions the and marketplaces, team and comes allocation I investing. over and which inefficiencies intervene important public with we've XX is it to to I ability companies, years So advantages portfolio our then of our think our in down for often markets scale, the for our operations really

away. work extremely to has formula reason environments, I that that goes continued environments any in good very and don't and challenging well why very see And

we we competitive and because at at size the we more better also as get get this. of advantage think of have we scale the We private get inputs. better larger, markets. fact, In But

about think to as dots If than recognition, you any firm there's who investing connecting see more in we dots, gets do. I don't the think pattern world

and that's in of something how we in world. can And other so parts relevant United States happening see the it's the

You can logistics investing. our see that global in

are powerful think I real our our there advantages and scale from model.

these persist think over return will premiums time. we So

want technology, scientists. In we've in I scientist got the equity, terms We a made got in data We've huge on be real We're investment estate our that and we've data private here quickly deal deal world's in to Steve time XX but in we team. them. just do would portfolio infrastructure, more than it. Every them realize comment, of a and changing invest we embedding ahead on of a of can the companies. say

This this diligence, five large area them fantastic interestingly. people. accumulate sort area. here That to figure six Because what's we when a sometimes due of ago. to department really databases, And is we them. probably with you We started use it's exploding. Steve. And is going That on hard saw years out with on

And we've we people sort do California in and is generative area ability This fascinating, people Oxford. at which of in whole a that lot whole with it. of meeting to involved our of have ethics the had out in MIT College AI the funding Computing AI area, area AI

-- outside last kind a dramatic a increases some important the be network knowing And involved very this here. night very applied of for in will of [indiscernible] in unusual of in but firm somebody [indiscernible] erratic so we these to of efforts on. Blackstone the just sector have large language call databases Commercial a models with our that of power outcomes what's going And who was I while.

for is those applied, their businesses this the risks example, -- generate over The own databases. is But time large of of of of one as individual databases. [indiscernible]

really very people You'll that. most be things able that to do on do model, don't very, unusual analytically which

in yourself strap on So this one.

Katie. please, question, Next

Thank with go JPMorgan. We'll Worthington next Ken you. to

in the to insurance helped for by two Thanks Hi. inflows pace quarters. focus has the part I relationships. like BREDS. of taking assume your Good I'd The question. up really last picked over morning. on

BREDS the to estate? from the market the Secondly, lastly, deployment real outlook for is And estate BREDS maybe similar or different for light commercial the for impacting are from very core investment So remains real real the from non-insurance developing for business. of how any perspective? of demand share the Can clients? how other opportunistic factors are parts first, addressable your estate And then size deployment you conditions deployment BREDS? your impacting

think to is are I quite and really Well, exposure focused spot has our real shareholders, debt CRE today. a business a leading regulators, on that great estate Banks pullback.

deploy latest fund, to the capital it's be we're quite our in in side of you new area, have that if It on origination positive. in which the fresh raising. BREDS can I think, So process

just in And It trying beginning of be see just people people can are at where now real real regardless exposure. estate. sector pulling debt about back differentiation and the We also of cautious call securities to. they're estate the the liquid at times exposed massive across you securities, the talked to here reduce

the the be And think very value the they loan the last will debt sector debt to a cautionary I much were levels in one US first. office a come it's in think there's although than So time opportunity where in estate area to lender space. were favourable exposure, the more lower Obviously that real downturn. I is in

we the clients regular things to have sizable. most broadly. clients. going different with so opportunity one here there. a be real In only billion estate to have it the would overall we insurance engines about estate, think this many very great way of continue I out alone It's business, have quite equity not We're $XX institutional is that we pursue business, which with and Blackstone in exists real is firms, big debt

area of think nearly doesn't of But attention. our dollars, growth do I us. trillion it's inside lot a for But an get it

more the next raising lot in of obviously we're clients a think I clients liquid the And and insurance drawdown. institutional for areas, think I opportunity. there's

Great. Thank you.

Brian We'll to Bedell with go Bank. Deutsche next

improve? But the in BREIT. net the to will kind more factor rent. do the over year? of I this a this the hedge mark-to-market that just of Thanks. for performance think through market therefore the mean, it improvement profile do and would How year? the think And move will later are that bit bond flow overall hurt about talked as investors redemption through you the turn improvements request, to the redemption of product little the long on optimistic or be of the potentially and about year, you Good you will a even potential investors BREIT that risk requests first morning, Great. course see of layers potential those reduce in appetite think performance you positive as pivot quarter. obviously, you folks. in we think Jon, Maybe

performance this And on remarkable you of same-store what's that the X% I it's flow quite we portfolio Brian, redemptions. large first growth the is commercial matters. real lot of saw cash quarter, plus ultimately, against $XXX there's as know, remarkable, in estimated estate. very attention, that What's think Well, billion a

of it big strength. but to rental the speaks just family housing, It's single traditional have where housing, this in student not positioning the real mark-to-market. where you our in there's rental housing the exposure fund, And in logistics also rentals,

talked We a and business area hotel data a about, has well. doing we center extraordinarily exposure one lot haven't is that BREIT have some

the that and is those we to positioning the that Sunbelt, the again, in believe real in matters Florida this on over difference BREIT and And here. look the as you Sunbelt Texas focus chose think sectors most places of what like that's maker. a we its time, we in fact of And invest really

look Now, as think I you a redemptions? forward, it's combination. going the what's impact to

volatility them in as confidence I will months now, it well think really and coming cautious as Right We'll down. towards give seeing people vehicles. show we're marketplace investors the all be equity multiple performance. positive of

the BCRED, deliver, investors better index. is flows what matters. that question a And we're resumption you'll here, markets The little investors, inception, given is since because what's think the the of triple to time. REIT That's in shows a the portfolio up, see performance got as think we volatile less more portfolio open working as we've we've ultimately positioning, then seeing as I If today become debt and business. are here. we positive of terms flows XX% this public a we matters, talked for built, structure then in more something about, But just this of

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Thank Great. color. all you for that

our question from take Alex We'll Goldman Blostein next Sachs. with

question. the morning. guys. Thanks Good Hey, for

raise else is we initiatives. dislocation, about could I those opportunity of out that talk you that in broader bit by there little a see to talked out is build disconnect But that used prior periods there credit of fit the looks it hoping of an to CRE, Where expand you the new private model? was to the maybe And as going think around all discussion what businesses. performed between kind lending could So interesting. currently been do direct has sort capital private things your about, sort for as a and direction banks the while. Blackstone we in really And little lending ability biggest of demand? a supply

would is regional real what well opportunity a loans commercial loans, home talked of in generally as the asset opportunities. are play direct Those role large auto greatest I Alex. say the areas question, area improvement of finance. today corporates The banks lending all in estate. beyond very as backed to Great area and about we've equipment,

to lot very there is funds and and what's share flow. continue I'd banks to generate backed can them to opportunity also flow area and partner a say of long NAV is we space. out relationships have the asset there who be want a of to good in another We that are today who term this with lending a see borrowers take happening

equity of funds, what's targeted more number you'll And I clients traditional happening we're allocations. And equity our a of also is potentially discussions. business and And here in alternatives the see taking of is a clients. here with space think started with private some particularly pension but what think SMAs, I out equity in insurance the of some money public and lot

take income somebody less opportunity little convince to is and the to liquidity institutional I in to a today like partner investors with fixed us. think

with see a private our we and scaling I why the And So you arena. in large golden up that's this for credit. a institutional moment really certainly clients insurance quite it's could bit think said think we

Thanks for that. Great.

go with O'Shea Thanks. Fargo. Finian next Wells We'll to

growth Good morning. Can retail. the you everyone. A question opportunity talk Hi, in on

success higher you. yields? market Thank with you're money for how competition positioning cash products against and the about

is say we're I'd obviously what much Well, in our higher returns. drawdown funds sell, we that targeting

issue. So there an of less there's

again If credit what at our you private BCRED. in vehicle produced look we

If at BREIT, done in over again, premiums we've you look what cash. meaningful

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think we return products time positioned. think But we matters. it's really these is So for well competition total are increased today. very over That still us that

Thank you. O'Hara from with our question Gerry We'll next take Jefferies.

for Michael. Great. one Thanks. Perhaps

likely You FRPR of the back to of mentioned year. the half sort in accelerate

give or of might I kind bit So you hoping of on it able confidence a little us about you be to color. What thinking maybe Thank also ex And helpful? there? a of just guess visibility then XX months would the related you. expansion basis, FRE kind XX throughout margin incremental to think sense how the gives be FRPR, next could any we about of

acceleration. the about on of my an but things. point remarks, in specifically And second BPC right. in we FRPRs two All see year. half the definitely I Gerry talked this to we before FRPRs

It's schedule. be what known incentive a have events. will fee We for eligible

mentioned modest last There'll second crystallizing we year very the quarter amount in quarter more the last little be year. times four first will -- in a quarter. AUM be think was this second than the in I quarter. There

really dollars. second function we of half visibility the embedded that be a ultimate that. will gains So at the decent obviously have on a that time, And event, it's but

below management FRPRs. interest. is crystallizes which FRPRs. income core. stable and And sort little based FRPRs a borrowers a those expanding as BCRED, of on the steadily both note investment It's obviously it fees radar a very relates also are I'd on bit paying is to That base and of

very incentive actually. source out, for the those note it's in So a quarter fees. break And stable first it that doubled FRPRs but of I'd BCRED year-over-year

-- I it's So stepping back, ones ability picture multiple I we demonstrated generate I there's we important from lot I to attention. On say would as fair just I -- is remarks, momentum, just the think, time. in margins, say significant think to get the said operating we over a big my of the think underlying not areas, leverage we've

considerable have our that So control. management time from periods approach We fee management long fundamentally of area and over underlying growth which biggest and for of structure performance and aligned have to disciplined a cost strong compensation. comes cost we

regarding always, I'd year, intra the back as stability. of about delivery, I focus market refer comments full confidence would from to quarter you quarter-to-quarter. outlook, last my not terms on in So year

XXXX year And continue full relative the think so I we XXXX, for do. to to

from next We'll question Budish Barclays. with take our Ben

Thanks kind next I wanted you for question. there. refinancing years? paying portfolio guys where there? a you debt thinking step about risk estate to portfolio, Hi particular. ask the there that under wondering, fixed about taking the companies across are the thinking have But estate or any of real in about real could How be areas up over rates are risk assets where few there potential

Well, are far in very in sectors, refinancing. We the near-term positioned what way get have the funds reserves is we're these most have I which is to we significant little And generally we and lower these strong than maturities, news would is really been operating in growth which in say flow very on at thing. of leverage the past good cash you we had that because has significant, ample the helps funds. the days when

obviously excuse we So had we lot positioned in a heavier US me, retail. done office buildings, in had

see value. at But approach look to think feel mean a assets would whole, used a to even refinance I from interest at It and our our as we disciplined good about ability our aren't very leverage portfolios doesn't situations. specific have we higher don't we we've when vulnerable. be expense, equity we you walked debt. and extend there times when at more And

some stats just mean, add I Jon said. I that, around to would just Ben And reinforce what

that the sort -- at capital moments. teams maturities locking are constant attractive structures, in fixing think actually best the of and business floating our managing laddering process, we're rates rates, making in, at floating I

estate And these across so just our and private are portfolio in companies. metrics, real terms equity of portfolios, some

four about maturities the maturity half average in are years. a life and the remaining With

the XXXX. So we're talking of about end

So runway good there. really

equity, a floating component. said, though yield it, senior the Jon And face even maturities in minimal rate there's As like portfolio but high typically, this on of a business debt fixed the a component, private also essentially across year.

As have times. the at to floating those fix mentioned, I worked our worked past rates attractive teams and in

attractive So equity private approximately two-thirds at probably of levels. fixed debt rate is essentially our

So we're very, managing I capital about think, conscientious structures. and our focused

Great. much. so Thanks

We'll Patrick to Davitt next go Autonomous Research. with

anemic. private BlackRock remains allocations remains pretty Hey, by had polls good surprising wanted be mentioned conclusion That was out to respondents other that an we've most appears to week PE And this from fundraising equity it poll there outlier year. which this to increase morning, fairly but you the a versus think everyone. tough, far I the seen.

as do they're lens So that of well? PE to could through poll that, with that is bigger uptick we allocations broad more thus the LPs and sometime starting a see later sense in you you your step to surprising in to this or discussions year more

interesting. it's Yeah,

our And love period their virtually line. every one and equity? it's clients. why Our the been a long time because the private love of It's private clients equity. performing they That's part of portfolio for bottom best of do

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So they or or target. that. have could XX% XX% above XX They're

our doing they they're but have allocations about quarter cases State not last because a so private to sense to important allocate. it's them of We the equity, make overall. some which they're broader in budget firm And allocations. In raising cautious cases some therefore they're I raising making in so New talked lack constrained. point And more the And only York secondaries. some so is of to much But desire. the it's would

institutional alternatives, insurance individual clients, like clients clients, investors. Our our

desire We're may allocated there to Those right -- they But clients become intact. and for reality. near are their the is term alternatives but some just strong. because now. in be time very mega over be away moment, things challenging will so a in trend over challenges structural go is And will more tend the desire

yes, a that's of fundraising term, lot environment. equity challenging what us near gives private more so confidence. But And a

kind a Michael of that amplified is their Jon survey, But it credit. credit to on. said that's changed. And theme to choice that's BlackRock And place indicates in low really same that XX%. was What And a increase decision the feeling something allocation not survey institutional XX% both time that. all we're historically of go. it's a logical at has up that's obviously, to that's of and first investors a want And interest been that rates, quite the

take from KBW. next our question We'll Michael with Brown

interplay and rate given Hi, Gray. like is of an that fee actually on for estate the segment, play know here, overall? there could could the those funds debt of the the how fair and a I generally segment but BREDS I growth the little assume output just rate the shift should equity on downward we the the how wanted strength to a in think strength So segment? put out ask fee to the fee of of about mixed for real SMA growth that and rate here the the overall insurance the for it the Is bit business.

remarkably as been estate Michael, stable. rates overall, probably and time long real points anything sort of the tilting in one of is overall affects factor out if management think of dilutive upwards, couple the insurance basis rate. have fee in periods fact, probably the sort fee of segment, I the that zooming And frankly the over know, management of firm on by on great a overall growth firm's you

rates, I rates, segment growth overall very positive the fee business time. such see on segments, I estate dilute the I would not around you management BREDS long-term are think think rates growth much relative can management both obviously the tailwinds and on the for of think fee average in weighted over by that actual the Jon chime real

Okay. Great. Thanks clarifying. for

next our Katz Credit take Suisse. with question We'll Bill from

morning. taking much Okay. the for very Thanks this question

the to retail back circling Just opportunity.

evolution here, products in liquidity terms So you you. opportunity update I'm will equity any the relates private to shift of help of business, design, the think wondering drive and the of any that? around incremental what pricing? do from through then think And sort if as the it growth product in Thank the nature us of opportunity for think could you or through

see more alternatives, an as investor to I $X average, There's or invest. area say allocated individual Bill. in X% XX% clients we people are the opposed X% still than of $XX wealth our institutional Thanks, of where in enormous are On to or accounts only trillion folks have XX%. as space would to this opportunity. million who

little itself So yield It tend runway to to does products. of better to a oriented us this lot a there in area. seems to lend be

started real surprise. a So in We credit areas. not estate these and

it relates as to the features. liquidity think I

job creating I think these a good we've products. done very

match So were we funded.

for better we've delay those a of running a has features I That managing with delivering bit you've on returns done bit structure. it probably job liquidity and this, us, out BREIT, quarterly when think of redemption and little which appropriate BCRED great redemptions a a a terrific our for seen with come said, being is investors.

can a these there'll and products I return to like potentially of program as use sell evolve what products, them focus And for you think and you both optimize be should Also, time, do be holding over long-term be is investors kind investors. a this recognize risk. how institutional these for little it tweaked sure can more make on to setup they when

think I Yes, private corporate equity an products. new It's of broadly equity. terms opportunity. area is In of private

deal tactical could flow. of a be platform a have sciences, be really We can could that it opportunities. lot us, it source secondaries, life For growth, unique

estate a is this real and than credit. Again, less area liquid

would we structure opportunity. the have the about haven't be an I with talked could So area think something then that. to call of infrastructure align on And is

so XX know, delivered that or you in outstanding for to As assets, years performance really business billion institutions. we've grown five all of

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other I think real areas, credit. multi-asset subcategories knows and debt, then estate So who there are

with having range semi-liquid the think of vehicles. drawdown them I mix for and build a in and some investing of as and their individual in for then we deliver confidence relationships both a investors products vehicles

a the of more grow. on I are caution as said, will the volatile think, long-term focused There's near much market. the trends, space. are People in I intact, particularly today. that think retail all term. It's I But very

you. Thank

Hone BMO. to go We'll Rufus next with

wanted to origination maybe is of insurance, origination. mentioned build but also the origination maybe and term be you've had margin put significantly? significant focusing helpful. opportunity, a ask numbers a out credit there the backed, capacity front-end talk some capacity, already I to much. so about amount your Thank very Thanks asset could Can in size you would that origination capabilities? around longer to a your you. And expansion scale about on key if few quite assuming that You've you Hi. really of areas like invest

number? The numbers, real the asset have origination you total Michael, don't do credit know, amount across corporates. that of estate, I backed

on The numbers our The effectively the more that. cases, our there of credit strategies. are -- in trading number the are and private liquid numbers in terms are deployment strategies around strategies, origination of some multiples --

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overall. is about mostly this assets think growth in I and the fees

white improvement in over to this improvement really, a we margin would a mean, see I margin in be public over the last seen just tends there this But space you've I lot businesses, our since would time. steady over all of time. area. XX years, you expect improvement see margin. gone in Like area, we've

in these asset all assets. engines direct real then large capability, you And of capability, you we origination these lending more once you doing about, have origination, estate areas a sorts attract talked of once backed commercial things once you're can a have

mind. still days early say just overall, would our I in So

are and One of years a insurance Michael. developed of Yeah, guess space Rufus, well this true. ago I'll we and direct for add, entered these out. dedicated is just I advantage very is and the origination both built things corporate credit, number three having platforms estate real with this insurance

be amount there leveraged but incremental undue some So to were they not with of an investment.

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you. Thank

take Giblat We'll Arnaud question with our BNP. final from

there? your less could the there. enter morning. really could competitors advantage there to competitive see Good your just you a positioning competitive a bit touch more of if you the the fact to entering on the to how brand Thank wondering be space, wealth of What's there. your are If the investors question. or back I you a you're just increasing looking come less for number private Thanks competitive situation I'm of I'm in private competitive advantage? maybe be that bit maybe so and wondering today evolve light thinking moat the allocated, about you. might how So your a might space

surprise more number no and say that I and when we the advantages. a people market have have competitors. What move of it's is So opportunity we in you others big expect to have see a would

in mover have her and our We team First, a we've distribution Joan job. really been built private space. wealth team. terrific done the out first Solotar the

the also We that financial and built States. around have the around world up the particularly the in matters world, is people relationships what hundreds ground with we've And advisors of on matters. here United

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plus were in is we a decade of We big dividends entered We've over focused fees All on and to time. new of added going this. the we net investment pay whole dramatically returns. this transparency all engagement brought down space a over when pretty level because

roughly. was. started, knew or hardly One doing anybody ten in other this years, the program like that for And we we thing. We've been channel when what were what doing

Blackstone call had, And we don't number, or whether the in-person we a universities, it's universities. have I what XX,XXX BX series know started the so FAs And who've at of we firm. been

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mentioned a thing enduring. first people when of quite it's about performance. And the really and really reputation is that and there knowledge Jon and is advantage, so And -- mover type

with So I one. leave that you

you, And joining everyone, Arnaud. Thank thank for us you, today.

after follow-up you look you. to forward the call. any If questions, connecting have Thank