Blackstone (BX) 20 Jul 232023 Q2 Earnings call transcript

Good day and welcome to the Blackstone Second 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 Thank call. good second conference Blackstone's you, morning,

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

morning, I'd are on file which like you which our to this slide expect in report and available we release remind our from press are Earlier control that and results uncertain a outside today's forward-looking a call not firm's differ presentation, may XX-Q we of website, to to statements. do issued and We few statements, weeks. may duty update actual include materially. the any and undertake these

an We'll of solicitation see page non-GAAP measures, also affect duplicated an Also some any discussion material in call consent. risks nothing the and results, sell audiocast is be you'll a find the that and constitutes press shareholders this section please of purchase Factors the to reconciliations release our to offer on could copyrighted XX-K. refer For Blackstone a Risk note the of to may of on interest fund. an our This not website. offer our or of without Blackstone that in of

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

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

assets milestone in surpassed quarter. the Thank all joining remarkable Blackstone and $X under call. reached We morning. Weston, a second good management. you you, trillion of Thank the for

map three Day more so do aspirational of to our Investor in manager alternative at presented the of years than we ahead XXXX. first The road

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of at believed structure structure of have our company virtually and have We've and no banks capital in to net in we compared parent We average no leverage, managing an insurance leverage always the with liabilities. conservatism U.S. XXx extreme our funds. the

Blackstone of the revolutionized a adoption investment field public investors, wealth companies in retail basically for alternatives which Diamonds, funds we today, XXXX, have there started funds participation. private no example, have manager only few were and management. virtually largest to sovereign led equity, the the were have in and class. insurance limited who of the invested As When pension has asset alternatives

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areas include transition, globally, stages. more today sciences The of credit detail. where Asia in of infrastructure in the large the private business these private the compelling these and energy in will and wealth discuss most democratization Jon of early insurance, the alternatives development channel, alternatives its

to Our mission since be the XXXX we the choose to best in is do. what at world

this Work we've never at excellence, our our Even teamwork in from our and believe strayed we've have the this dedication aristocracy, to and these that us, firm, including you customers. mission embody core mission or values. grown, from values serving defined must integrity,

Blackstone is extraordinary an place.

and on we're funds firm accelerating. lift our the We turn striving I looking best our And for new prospects in ahead always the to to rest Blackstone, to shareholders. Our with over the Jon. investors never believe and ahead, that, are strongly achievements, ball heights. is our

of trillion a $X marker Steve, in Thank morning, and into early on markets mile are potential. you, a is we our enormous expansion longer much good and journey everyone.

Of investment course, performance. it all starts with

corporate we've funds. in for and invested estate XX% secondaries, which institutional for net in remain BREIT's in XX% XX in XX% opportunities tactical perpetual and funds, for And XX% X% share credit. continuously and in we've drawdown our returns years. equity XX% opportunistic real net largest delivered estate over XX% real our returns strategies, class core-plus annually In generated private our infrastructure,

another our risk. major number compared quarters six investment-grade spread or over There we of XXX credit similar ratings of adding over a the of way, basis drivers with for produced outperformance. our without insurance excess clients, points past to incremental are said And

continue matters, like logistics, emphasis sectors and right where the we've our to benefit more as thematic from than global invest infrastructure has grown, transition. we ever, areas you winning important But picking energy markets and become and digital on

the sectors in our among companies rate It's our estate with holdings across for worth appreciation which quarter, of view noting, environment in In our as forward, going drivers extremely seeing second inflation for funds. the flowing these signs we're particular. positive largest portfolio, real strong of valuations and also were along we the

fundraising more raise very Michael in performance QX investment our strength scale decades to portfolio even will detail. discuss capital allows challenging returns The in us positioning our and over of a environment.

comprised inflows. positioning quarter and with credit real $XXX billion for over Total credit dry debt us nearly past of insurance billion. and powder in estate inflows months, record private $XXX businesses demand our $XX QX The second billion reached and of XX solutions the XX% is today greatest corporate over the

raised PE billion capital we $XX expect total to drawdown size and additional Our range. we bringing the for corporate $XXs approximately low in area, billion, it fund a our flagship

$X.X Overall, target billion of remain achieve another substantially early accelerated on this our close $XXX it by raised our an and first later XXXX. expect we've real billion held close also and We to month. track European flagship of nearly estate for XX%

solutions need demand a insurance long-term credit the back, the cautious, same investors, and Traditional number liquid portfolios companies, with and time, of credit for investment-grade are typically of LPs is attractive areas from underway and our LP long-term credit, highlighted starting shift institutional both including a banks with particularly large financing where there accelerating, in dynamics at intermediaries. Stepping purchased providers Steve are hold assets borrower for market. while structural business,

have auto other to we are originate and efficiently that serve home constraints our credit, behalf. leading with finance facing areas banks credit assets but estate capabilities renewables. With real their billion want in and platform improvement, high-quality greater and directly partnering to like We're to lending also on continue $XXX originators their in and customers

with processed more channel, billion from $XXX manage quarter $X to clients. were today. $X In Inflows $XX the four closed we We've this partnerships totalling insurance over than these billion more. five in or from add and channel billion plan having largest $X the of billion our trillion second

in a largest prospects. are forward, We of them who, clients strong combined on of the US of with our from two pace sellers of pipeline fixed second annuities expect the inflows going additional including basis, from along a a

Other areas in our momentum as credit strong are well. showing business

on QX weeks subscriptions $X our expansion X, and in and Europe nearly direct monthly today. from few up vehicle complete at plus lending XX% billion billion is a BCRED raising we Asia. second to $X.X the we $XXX energy platform of see global and green expect approximately raised million Our quarter, credit the and in over U.S., $XXX attractive over in billion. July opportunities

to infrastructure. Turning

next massive year-over-year funding sizable our be and digital we strategy for XX BIP It where years infrastructure globally, years X infrastructure needs perpetual XX including XX% billion. projects platforms. areas, fastest-growing energy transition, notably, up Our to is the will building of over $XX are to

a in companies mostly race infrastructure, are centers. to data digital arms happening the is invest well-publicized years tech AI, and in major next this area, First, five $X the trillion expected in over to there

it's previous we $XX XXXX, QTS the capacity and business privatized more with years in than BIP the center last for and in showing XX. extraordinary BPP the two BREIT, leased momentum in In data billion

We this growing from expect rapidly the our investors will significantly powerful sector. in tailwinds benefit

been legislative in action also to over equity areas next projected BIP years, of trillion This credit further annual has of supported In and energy dedicated our busiest funds. and X globally. energy require is by XX investment decarbonization our transition, transition $X.X private the

need stake and five X% a portfolio nation's growth transition firm's utility company, time. The will largest capital were support to generation this years in Invenergy, area only developer. our significant for a coal-powered We its commitments two quarter to major private the largest in second capital additional and renewables in scale the for the from expertise increase over believe in

an funding substantial a in Moving sciences opportunity. and model unprecedented Blackstone portfolio for the have extensive to medicines, across advances life ecosystem holdings in and capabilities shift drug Life development the with Sciences, firm. at genomics created precision coupled an We've major with historic established

dedicated has office and platform companies, -- vaccines been the sciences, in sorry, life concentrated pneumonia. capital to lab assembled Cambridge, actively BXLS markets our biopharmaceutical in BX deploying med development biopharmaceutical with of I'm dedicated We've recently tech in also Our support world's estate private real like major for great Massachusetts. partnership business largest most

launch country The regulators U.S. market and another both India projected business remain represents coincidence. cutting the real channels. for we to In is to landscape in is largest the across first working alongside opportunity estate, our changed firm, third equity fastest-growing after our Asia distribution and U.K. the by X significant it's REITs. for even the world, and no of major economies investing public India's lines

large its alternatives to outside the is for to business substantial early Japan capital. there in ahead stages runway deployment investors of Overall, well Asia. Meanwhile, opens in as starting opportunities as terms trajectory, as both to in allocate market is our of

estimates allocations Finally, private alternatives exposure over XX% platform. leading We've to low $XX significantly market the team to is we moving research This Stanley's us established is time. an more the to single-digit want to products. allocations Morgan with today. to discussions XX% distributors of trillion wealth our world's alternatives this with the further tell AUM. substantiated recently $XXX of they cited major rising our billion have who by But approximately business with

the for so in accelerating, face this growth January of lowest nearly confident far positioning peak. channel, June down flows of our share we been in And performance. year and in near-term mentioned. Although terms month we XX% this BCRED's I was do redemption requests, BREIT, term, given exceptional some from headwinds portfolio the have the reacceleration as remain Longer

building have the of the We're size. could scalable businesses we front and I focused us, simple, space highly opportunities in energized about in confidence we're on closing, firm's Blackstone's future. not are In tremendous to prospects. tackle repeatable of open and more

And turn that, Michael. will I with over things to

everyone. amid resilient began Thanks, good Starting crisis which firm with the quarter, morning, delivered Jon, volatility, results financial and steady second market and related fund results. bank In the performance. the and

up billion. AUM record morning. billion new to AUM to record $X a breadth this engines driving management as expansive of year-over-year to growth increased Our The AUM lifted rose earning trillion. to $XXX levels, Total you've X% heard year-over-year fees X% X% $X.X

of Blackstone. coupled marked by $X.XX Fee-related quarter second the Notably, quarter the growth XX% year-over-year in increased the growth position. base the to at fees, management management XXth billion fees earnings consecutive firm's robust year-over-year $X.X or margin with powered per in share,

XX% as million, doubled $XXX without other perpetual real estate multiple performance credit. quarter-over-quarter contribution rose fee-related FRE to revenues driven sequentially in from and vehicles by nearly from QX BREIT, even capital

the further As second of accelerate in platform. BPP number concentrated a noted events expect QX revenues half we to scheduled this previously, in these year the crystallization in with of

with was last affected QX. record Distributable from a largely stable year's earnings material billion decline realizations share, per or year-over-year quarter The by the was $X.X which net second in were quarter. $X.XX in comparison

sales transaction activity has a backdrop remained As against slow expected, generally. muted

to did own public of stock of equity holdings, However, a rate private the for of along billion warehouses portfolio Lodges warehouses continue with firm's to which the of certain execute for $X.X at Pro we sales largest the X%, the indication we $XXX positive billion in of an attractive are of Vale cap exposure. U.S. our

of our BREIT quality $XXX invested resort These sales portfolio. hotel X.X embedded value premium its a illustrate of value also carrying quarter the included a a exceptional the multiple December and in of to and times. Realizations reflecting sale XX% million, for of capital

forced model markets favorable. sellers less Stepping when on keeps us focused committed capital from are back, being long-term our

earnings in as underlying to continues realizations In cycles, During firm's a is these the interrupted, heal. our portion markets we've seen past periods, ultimately of as earnings related but build. to reemerges power a meantime,

In in more the Harman's increased realizations for firm positioned balance than well to revenue revenue to the and sequentially store of a has doubled value $X.XX $XXX years. supportive we ground acceleration on second in AUM billion are the an Net eligible or more sheet accrued in three markets, the billion, the per quarter $X.X past time. performance grew over context record share.

on coupled Nearly with Turning with private strategies in growth pricing revenue power, X.X%, and funds to quarter. all second our flagship of companies The reported corporate equity robust overall. along performance. positive high-quality of cost our favorable investment reflect reporting XX% year-over-year, the margins appreciated appreciation expanding with operating focus positioning These deceleration. trends businesses with sector our

In real stable. quarter, were Brent funds funds the estate, the in appreciated the opportunistic core+ while X.X%

growth. real terms market We in student Half in are growth owned of year-over-year in of flow data sustained experienced sectors housing centers, logistics, our in have cash and which key seeing is double-digit strength estate rents. our

is our In at housing are U.S. fundamentals a high cash holdings flow single-digit overall, stable with rental rate. increasing

XX% For to in same-store strong of BREIT, growth approximately NOI X.X% the year. these over first half concentrated of the of the is in portfolio sectors leading

reflective very in inflation the interest appreciated respectively, and lower rates lower and strategies X.X%, default real credit should In do in Despite generating our further favorable liquid quarter, less current be low which our in overall. a of at a healthy noninvestment-grade and private uptick remain portfolio, forward, of the expect portfolio X.X% the estate in credit, for income. to broader strong defaults environment than we market rise X%. second rates, portfolio Looking moderate

performance. the representing X.X% BAAM, positive quarter gross consecutive BPS QX, the in was composite XXth return in Finally, of

the for of job composite in to BAAM Since is environment start protecting past return up investor capital volatility markets. compared XX-XX over the of portfolio. an outstanding the BPS XX% traditional several X% net in Over an liquid has the years, XXXX, done significant

firm strength expanding an asset of a the growth we extraordinary of base, over on beyond. a years beginning, is achieved. path the the foundation $X and long-term many towards building the and view ultimately the returns firm's Blackstone. reaching at an taken In we've trillion today, very closing, the continues Overall, business From believe we've well resiliency of enduring

Today, reference and a have future. scale brand will powered and performance we reputation, in to industry, culture, as This propel what our culture distinctive the innovation. institution our of date defined decades the our our is and our believe has success our assets we what of and by

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

America. of go with Instructions] to first We'll [Operator Bank Siegenthaler Craig

feels billion IPO. inside Steve. And It the question around US the it you congrats at on years My is expanding $XX trillion. on were hitting ago, few just industry. like banking the a opportunity

forming partnerships. first, So

I heard to in may five to at out building buying be assets supplying some and the now about prepared remarks, capital you point. have three, and that originating

So months across the verticals? failure, these us we're now an update provide outside of Valley bank you that four Silicon can three

and Craig, for some What of banks thank companies. insurance for between now here partnership really you kind particularly long-term we manage, natural we've capital Sure, the origination and there's the words. capabilities that their seen a is recognizing

we what close formed have the in of we and prepared number a or So referenced to executed have these remarks partnerships execute. was that

have pipeline We behind also that. decent a

bank think And of have partner take those makes to a finance making like some a a they're X-, those customer equipment of home relationships, if with improvement if strong to about you loans or lot XX-year X-, us sense.

number sheet provide institutions, things larger also involved I those balance financial some doing to we're do with capital. other of We've with things a them with maintain so different want banks out relief. been of the point number to who do there a would of but customers, create to are either items capacity. discussions pools with sheet shrink relationships or balance in their their with And to

for banks, system. happening customers, I time. the over expect good for significantly is obviously this the our grow good and what's will and it's we think financial So good for It's

just This from just pinch They sheet add One balance where not a is keep to is very regulatory of like the to feeling everybody phenomenon. pressure. to is much thing They European don't I'd have customer. U.S. assets, producing them. U.S. and their hold all but it's keep they like the

area particularly interesting for a us. that's So

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

we If it's in C&I big system, better a credit. So the didn't across banks you cycle. whether and credit losses coming private or guys the on the for feared, loans credit look financial picture in question credit at

So it to maturities debt some but the of than rate less like also of this seems limited impact potent hikes maybe perhaps Sears. is perhaps relates

you the out? your curious views private and here. long? So for risk look how much remind do playing markets, And at just is of just us can how hedged you if this we outlook And how credit see rate and maybe the all

Mike, hasn't in They're default So it. high raised the the been has the are that surprised, taken at for how instance, rapidity been below rates leveraged the average. everybody more at say if long-term X.X%. they've They're which distress. rates has you rates today, Fed market, I Interestingly, are loans, there approaching and given would still overall look

I X%, XX%, think to during the got is they GFC. the up long-term XX% average

the defaults What I -- those say would by still are less than way, in our and own portfolio, X%.

think So some I think but hedges component it's of a of place earnings of protection, a place companies. things. in put certainly the may of I is some It biggest couple be as it the the of strength function longer-term in the people

own at becoming in it's referenced has more their think across helping in growth XX% we're are seeing obviously our profit-focused, cost technology and Michael strong portfolio, like that earnings and obviously this. looking structures that areas revenue EBITDA supported growth is and revenue I companies growth so borrowers, that our

had Would it's we think like expect is, kinds And elevated? then. But is I question, think to over 'XX, overleverage of if a think back answer yes. I rates don't moderate forward? time, more economy is defaults this I the you expect, fair look stay 'XX. as we have out you we going think as the that which the don't I does

people to cushion less its course, much were have levels if prior why that's don't book. And a nontraded that and this more the you on And our focus of contrast was BCRED, of loan at look here that, BDC, I you hike. when point originated distress. rate to of average XX% think period you reason its on was plus value another out, to 'XX leverage And to 'XX, if it just XX%

ground, So expect. on people would picture the than better today certainly

we'd forward, as get Going not but nearly expect will that as cycle. last that bad tougher things

Jon, let on Mike, add Michael. me that. it's just it

Just sort rates, the of position focusing relative sector and it to respect overall default our been market think, versus pronounced. and important, highlight And focus. team our and call It's outperformance on scale, it with the selection Ss, I our to would seniority. has three

scale, On obviously a we're large player.

We issuers. to the again, high on believe, are environment larger inflation recently. that's in shown been are to we already through focused And terms been Larger shown, options it's companies cost world. And think, a overall, respect to in more resilient of performance I with a inflation more cycles. rising respond

selection. sector on Second

the industrial you companies, think, certain portfolio of companies, off. look discretionary recent in from years industry our sort cyclicals, paid as at some If focus average, away our versus I consumer really

than even direct with Jon our loan in then And seniority, to senior peers some actually, substantially area to BCRED in And of the secured. in on respect additional lending portfolio is cases, touched lending lower which our that XX%. value, basically direct XX%, are

is that the protected. top so And very capital of that is and stack, the

and in overall us. outperformance current, market historical both But about talked and and we drivers to sort of rates, on been overall of underlying rise default Jon think has has that I rates some So expect I do think, for the our path, and to sort which highlight. are them for important default the experience the

Evercore with Schorr ISI. next to go Glenn We'll

get has same while short-end in in on a the the last of in if kind picture hikes. curious for range been where the I'm estate now real even rate -- the of big general. as Maybe XX-year we

the snapshot debt estate think coverage leverage-wise wise, rates have as at So be to general in the pitch in Maybe you off handful that's that where levelled of real we're if for years? I you think next take environment cap service on well. over what we're and going a an could is sales

would real there pretty that estate. continues be to in significant I Glenn, Well, commercial say bifurcation

in States, we've about So office in past, portfolio. and ways the think, the space. X% which And than terms foreclosures sectors underlying that there, think And forward. we've I notably in certain talked a I real more more will would there about talked coming have United own is continued will fundamental of what markdowns face go be, still be headwinds going our we challenges to it the be in less portfolios. of

double we continue in to the sectors, fundamentals particularly again, real data sectors like around I say, growing And digits. Other between with top largest strength, represent then underlying sectors, sector, three of centers, remarks, our real which talked a those We see in student rents logistics, global about somewhere other strength. of number housing where XX% I'd portfolio. in strong areas are globally our mentioned, very

and And so the rates would level that reached I seem are have fact be may better what and say to the in fundamentals heading a lower, good, is sectors belong where to seem we'll see.

stick they'll think I around here given end. short the

take point, obviously cap XX, the to the will Fed down, that's positive. short your here, pressure very is now, tied XX at rate end point from rates. some start to And months to Because

And the rates we're much at going risk of where table, in point a the the to estate. so that's helpful off real if cycle is higher

decline is in pitch a seeing helpful in sharp new you're estate other supply. The real

around where down is depending in and aggregately we've XX%, of XX-plus you're a areas. instance, about Housing supply XX%, starts it in other decline for markets. seen seeing hotels logistics, new it So was percent on from and

been pitch. asset threat. marked really sort longer the significant a of if vacancy you rates has investors, and new over be is And about you in no time are the out we think, to this as think are If rates the where can interest there's opportunity. less market, to then major coming of underlying the today, invest And so going there's building low think I that, if sectors

most And at, we're real area around U.K. the the growth you Today, logistics European in it's because instance, estate, incredibly negative. strong. rental sentiment European if is yet real so is particularly estate active in actually in for logistics, look

think what's I in opportunities. everybody where happening but that's the real create about extrapolating we're buildings a some to is So office moment going in incredibly sector, negative becoming

and sell be capital people on to the debt, inject there there. out of And will that point higher to needs costs debt to for and your sell are because

think we coming selection class sector and new rates around and I then matters these supply the about very really helpful as should off over asset be down to talk tailwinds So leveling time.

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

I on could that. together, I you if added fastest-growing it you if of $XXX transition difficult can core platform, you And you two if because blend and direct of about can energy and then Maybe just you I also million. know all products size products lending, your platform, the mentioned obviously, Great. talked infrastructure know think the some energy maybe transition a or that be of but don't our

you I the if where sort of years, just know of don't a confident will size they over years, be And your if overall execute share could projection in of not? a larger maybe on three a franchise next that can you be platforms those about three not or think the

finishing that capital infrastructure a probably be would equity And the market which transition say fastest our of energy probably $X meaningful our of chunk probably growing. we I transition, is fund, we business. the raising expect but on It's with then side, in the plus. energy we're billion energy will in energy energy one credit are the We're early $XX off third So billion billion just fund. days. $X transition

and private in core -- our went energy equity bunch we investments transition you private business in business. have If of way, our there also and by the a embedded equity

transition. don't you've the got have is to So this numbers capital handy we're it. would areas go of number you a through in energy deploying But where be. would I have

business in we renewables looked I we you Invenergy, dollars facilitate $X couple had quarter, our biggest energy Northern also utility billion a the And transition. two in the them invested billion we to the put If then investments an of into help we made were investment said, developer. as another Indiana large-scale

a know years we publicly said we the So size the I we is lot because two invest and that We couple number. growing market say would so we bigger. be the ago. to don't this of desire investor to exposure is this decade, of that I as have a billion if well, over for said expect ago growing can quickly $XXX a years think

you when that needs. is of the very this over difference. and can investors Blackstone scalable, news expect say in a the And the it. large, at want US has area so would very of IRA big be I accelerate. be lot capital will a will this made look It good time, we So The an

billion There last large-scale passing. IRA was in years, projects announced the the an basically since was renewable and amount $XXX in announced there of the last equal year

say area fees and So and generate grow would in to opportunity returns result for very for incremental we new a investors. large and us should scale

obviously, value Brian, capital The going term. energy transition pointed of shortly the of in portfolio with area billion, $XX numbers, that near funds our there's that add just market at in is committed to And to and and to Michael. increase we've the today number. that invested that fair over sort be that's investing

number terms that own grow. of So that in will But in what today, ballpark. it's we .

the the bank trends that strong the got the And versus lending limit Yes. know obviously, good $XXX partnerships of and Any of of with in banks the the franchise potential would I going pipeline. context, on just you've and side, obviously, constraints That's then the you -- the growth just that sort great. capacity direct back? said -- billion,

equity -- in expect We grow capital days near volume set and certainty I Well, well. be think new to We've deal very think area companies valuable, up, this access this the the as particularly it's direct private lending last firms opportunity as direct double pretty for is need pick seen term, in XX our lending. up proven other than We picks large. I provides, should pipeline to more would the transactions.

why At some if I as a We and a for of direct leverage percentage high-yield look you at change see this But so forth. lending market, plenty markets still should the and this room grow. overall there's down. lending point, slow don't reason to of think

still it's days we early this So think shift. on

next Blostein Goldman Sachs. go to We'll with Alex

the with of broader So couple some markets couple a John, shoots IPOs, maybe a capital We've question seen environment. deal a on green announcements. of

about for thinking months Blackstone next, to of are how XX six capital you the sort so? call or velocity So it,

activity that versus of capital some resumes more reaccelerate So likely pent-up this to you And expect resumes, of how strategies meaning, market demand that kind are cycle to see once that some less. importantly, as fly of sort fundraising? do are there

to just kind your thoughts get curious So environment/fundraising. and of

what's Because clients the tied interconnected, if to our right? Alex, numerator it's It's right. denominator, you all obviously about Yes. in and very you're happening market. think their and

cases, -- today, many in is allocations. their denominator their are So challenges, and there they're over

allocation equity a have private XX%. . they XX% say, to XX% Let's or in there at

up, market reducing assets, equity and private could As IPO the them sponsors to potentially markets exposure same so numerator. sponsors, private picks real rally, allocate time, up equity estate in again. activity sell rally, then the as the At that M&A and for frees equity again, to capital

We've things many times. cycles these been tied. through are these So

uncertainty activity. around inflation Our expectation will X issues, and enthused. M&A how And lot a We far see pickup the is of hard of contours are that markets a in do little uncertainty think reasons we IPOs. the uncertainty why uncertainty to had banking looks more why go. certain. the around the And getting inflation reason got on you would makes The it a is more I and that's Fed of

ultimately see slowdown, markets put we bit. all-clear early sign more possible see are lead a people of too but it rally, to that back We pickup activity. way is tends to its to which to an Now it's we in this confidence think out our -- plays markets have economic as through the transact, to customers. an I sort And to here, pulled beginning

investors. about period also of it from you for ability individual good from terms think -- markets our a we're bit lag sustained particularly very helpful in fundraising a still institutional now, but for as Right activity, of investors, raise to there's capital, a is

UBS. We'll Adam next with Beatty to go

wealth BCRED are the management are want and the accelerating. on though to Seems elevated looks redemptions side, retail about channel. it like relatively ask still like subscriptions I healthy even

that So improving. as is the definitely it channel such seems

BREIT the not On side, gross subscriptions so maybe much. quite

wanted I channel maybe seeing get half? for So from the on back you're hearing to the outlook and just and the thoughts your

there's taking the returns, hit return, the equity-like BCRED, given attractive obviously private a it. of for today, risk you enthusiasm credit lot Well, In debt-like risk.

And in that's I we think a flows so versus positive. we up QX, XX% have seen strong the and obviously we're flows QX, said there.

In of BREIT, focus around sentiment, obviously, lot and commercial estate, is there was negative a here. more there real

nearly said are where the redemptions share the they down of the XX% we from beginning is were at remarks, good in As the news year.

expect subscriptions markets positive continued that dialogue. months The performance. sentiment is negative We overall remain ultimately have but would will strong a obviously three did here which muted, helpful. and real in in in abating change row, that commercial we estate some sentiment that of the negative

that project. it's hard When happens, to

that structure, structure, which you market. thing, a the And terrific customers public had performance, think product, REIT the XX% product that back the if the the a net key ultimately X.X about experience in inside drive of will redemption have largest think semi-liquid get people to class the think return to been really is allowing still They've I nature, BRET. delivered share years, it's times three coming people the we and capital the out. over

it doing time think, value, important. over really I and has But preserving been

that in our When be helpful in the confidence getting So But redemption time through certainly, say. will hard high. that BREIT regard. remains over it's really turns, to backlog

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

some particularly firms merger Yesterday, released best used crack to platform equity hard guidelines, of its to the which private roll-up and draft their have strategies outcomes. down on that create FCC planned appear

of a much changes your roll-up process firstly, impact to deal and investment your strategies. thoughts result do an can any you initial frame try volume works? if historical has So have secondly, how on of you those big been how And on platform have of could how

a that what already. years. have FTC assertive environment was believe that they've last had the They more three the we've way mergers. just been codification And approach the operating in of this announced towards really operating been We

it us, we're For expect not oftentimes, in haven't as as present market. of seen an impact large might we because one a given

big not of is things issue. an buying as So

some been And portion corporate of have many hasn't We That are a private activity up. the our credit of additional equity in major it not have on roll secondaries remember estate, here. side, corporate But acquisition where we acquisitions issue. private a things so huge been do, private done related we hasn't in strategies equity. had real the

exit what real likelihood now consideration say talking would businesses, to where it's And looking when getting more about of impactful is our we're is to some something strategics. we're the a there's I there, of and through.

impact our players. on on that thinking so nonstrategic has attractiveness of relative And players relative to had strategic an what

focus through we're really for So is strategic I been navigating through dispositions been to we when say has players. feel navigate confident We've a the and key time. that the would to -- in it, the looking of of some reality potentially it this continue marketplace we'll at area

next to Ben We'll Barclays. with go Budish

acceleration. the fee-related Sorry the they in to Is of kind about of quarter a half. expecting the like in your there on performance that, mute. an bit sounds little I ask still kind about it surprised any could size of way acceleration sort revenues, still magnitude, and wanted you up you're that back

from And then thinking schedule of next know year, expect there's I often just X-year crystallization what sort we of about BREIT. like a outside

what from on on what to 'XX 'XX based seeing thoughts right now? we expect any So you're should

that specifically year AUM than Xx are And Sure, to that's the year year. scheduled the Ben, on the saying more we've we fee-related we that scheduled have X, seeing last playing have second in to crystallizing Yes, in ramp since this with it's of you're and Michael. were what the year half early been BPP, revenues, performance out. really

that, can now, some that's Just net you which granularity BPP, XX% quarterly see performance fourth our weighted on balance towards to scheduled about half, in put the the with of right report in vehicles further second accrued substantially crystallations revenue the for quarter. and represents

that should So around some you give texture it.

fee-related year. also about we fund, see a of actually BPP lot. And for That necessarily then than alongside I'd we're schedule year. crystallize next this to infrastructure event our asked But don't sort will a be about AUM lot that, and highlight a significant performance crystallization revenues, on not lower year talk next will or

sort credit both steadily on power, earnings our two numbers and and each the see quarter They it BXSL, can On of have you in BCRED quite income. lending perpetual generate expanding based obviously, direct predictable investment and and then fees vehicles. actually

And XX% in year-over-year. taken approximately those our of performance half actually the and revenues second they're quarter, fee-related comprised up together,

revenue. sort think, in embedded, our performance thing fee-related a is that positive So steady I of

are here remarks, position there multiple to my products over in are at said I as a in performance So revenues time. work fee-related generate that

JMP with next go Securities. We'll to McKenna Brian

up then And start BCP of as looks with strong your second for following off performance it on strong is first well. has the just been fund comments So like Asia, XX%. on your a net to return Asia fund

about talk could performance the here? driving So you healthy what's

And building ever you then and your to do strategic to more of capabilities look accelerate but M&A look you'll in to growth would help out broadly, here? just assuming the organically, region terms this I'm scale in

Asia been in us for story has India. real the So

good in and it's team in Our globally than And there kind particularly private had half Asia represented, our weightings, in delivered think, in amongst have frankly, team we has very and private turned about the and of Dixon others real different estate And I returns activities. our to equity, that's really decision. at be a the India. region, of delivered, highest equity out

selling corporate think That frankly, been control-oriented opportunity. seeing is investor we a nonstrategic very region, think which India, there in We're also the more today. the we'll market opportunities We've is strategy. opening see more we is across divisions in volume Japan up right good to And there. off

of of economic acquisition. need the and be some because in Asia grow general, We don't a as headwinds is to geopolitical you much an have challenging, really can the we to more little But think larger. issues. China do know, the

the across this region. quarter. offices guess, I X-plus, have was I We there

to Our it's as it And to scale. think places at really in hope ultimately, a Asia alternatives. we relates is we of underpenetrated our Korea, that momentum like Australia, strong, and have in market all strategies virtually

equity in world. credit side the we plus got real private fund and on So of Asia real estate sizable estate doing have we've part a more sizable fund, Asia in that the a fund, we're Asia, core

the a country has our for the growth. will been add given today. opportunities has continue to that there which think market, given mainstay incredible I place. Certainly, of scale of There largest lot a India, tailwinds the we'll us Hopefully, just be are

Brown to next -- go We'll sorry, Brian KBW. Mike with

about So through billion the raising products early you're outside this do touch or you achieve it allow that how that will you the like the the launching in then either wealth the think channel you years? key year substantially some just new XXXX. And channel, the channel, $XXX of into year? funds on of over coming XX% next can drawn this way the target, you fund, to by drawdown growth on later And anticipating are in opportunity

substantially Europe, on just to to the the on that next in Mike, by start, some big XX% but Obviously, early it's of the BREP path debt just funds had we we're with, coming quarters, year. we first -- our completing I'll that and the where funds. to expect of close, fund we've a expect that BCPX,obviously, estate fifth completing real other a over continue. and number market

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you light it deployment, XXXX. percentage fundraise coming because quarters into on accelerate based them, over so that will the later because after obviously and you funds And lags close

that's of the picture on sort path. So the

then And individual yes. well, new was investor, question products, the around

in we areas scale funds, are a Doing new. started don't we'll other think products. talk already this at we think latest know products, more We today of greater range do later of some opportunity. but if the I small one we've different prepared what in there's to about something And with we're I the do year, launch Europe

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wealth the private have with job relationships team Solotar many organization. her financial around people terrific very done a up built We've Joan a world. and have We large advisers.

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and products, to has do over we we're more why we the focused, we're launch but terms deliberate so of that's we what way opportunity in time. new So see work, and definitely

to Capital BMO We'll with Rufus go Hone next Markets.

minute the on you FRE if margin. spend Maybe could a

You've XX% side. of through you you color first that give through expense think the half the done if year? about some of so the XXXX. around How the And half do back could

year? I fee-related the growth some helpful. the shown comp help through Any ratio us rest the really detail You've think can discipline would of you there about expense guess, core be on

Sure.

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margin looking the say year. year at fiscal reiterate XXXX, 'XX, compared stability as would prior I'd around full just comments again, So to we our full

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the rate have growth And those happy not so will that through second we're benefit. half but all to now, we're say OpEx

margin around comp you little full just overall a bit I ratio But would that's year point both period. it. to kind around So overall, the of texture of

Arnaud BNP. to with Giblat We'll go next

terms. come the like understandably the look we about private at If evolve looks slow. a deployment, just back could which yields How forward? when certainly wondering going about been moment to this credit, I'm It lot you golden here. I has talked does and

it's which comeback wondering just I to shift. more linked markets market case, think loan capital from to the a delevered about healing share market suppose competition, and so the I'm perhaps that. there's in how

market should pickup, could see together. And tied begun are have about leveraged credit. should enthused more things loan credit, yes, it's to I and And said, when as transaction get to the to we So and which lead deployment obviously flows. of volume. an see a These acceleration people tied

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competitive, tighten is long when it to some existing and more come I believe point, on spreads rates somebody think loans down. starts down where come and where that market, at becomes look if competitive spreads people that's to market high-yield refinance have leveraged the more where becomes or have the loan

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no at this additional in There are queue questions time.

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