Blackstone (BX) 18 Jul 242024 Q2 Earnings call transcript

Good day, and welcome to the Blackstone Second Quarter 2024 Investor Call. Today's call is being recorded. [Operator Instructions] At this time, I'd like to turn the conference over to Weston Tucker, Head of Shareholder Relations. Please go ahead.

Great. morning, to good conference second and call. you, and Blackstone's welcome quarter Thank

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

actual forward-looking like you that from today's We expect report materially. XX-Q may remind our results are in a and may not to duty include statements, do to file few which uncertain weeks. statements. undertake I'd update to We call differ any these

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

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

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

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

area compared the price we of position in in inflation consumer different we earnings Good good and strong estate view unique morning, because saw and took inflation part index. we of thank many deal outcomes about moderating you with a call. real of the our shelter participants. understanding on spent our We a calls, quickly how seeing time were for component last that several other the more our our joining of market talking to

decided X and yield the report deployed billion a pleased peaked. nearly level As in in the second to a aggressive in new quarters to I'm years, since that highest of we $XX treasury convictions, more billion, XX-year to investments. last X approach adopt the we our result quarter, $XX the

continuing rates This we values be significant Blackstone's the inflation the to to this year. time. for very cutting asset cycle positive realization Fed a for over interest foundation With should expect and recede, begin provide later

largest $X.X As of in decide areas collected AUM, alternatives in insights concentrate with us the world help the to firm across real-time trillion data portfolio global our nearly the our investments. that provides which

This for data to essential asset us any also manager. paradigm alerts shifts, major is which top-performing

demonstrated since that equity the significantly the loan founding XXXX financial Our this our when in firm in XXXX extraordinary the crisis. repeatedly private values estate investment business opportunities into our of collapsed real in platform our foresight arose credit crisis. including has the to following expanding advance By extend from global decision and savings

of business over institutional now and to for later in that platform develop decision strategy across anchors the infrastructure create XXXX start alternatives for perpetual same and year infrastructure Being the Blackstone, dedicated investment private first channel $XXX the overall large-scale to XXXX our a first investors, introducing in firm wealth a billion. an perpetual which product and

of we what investor world. own in platform as own of the in ability in types fastest-growing transition renewables in all where fastest-growing private energy the largest data major an warehouses innovation time private at right demonstrated world; developer basis Logistics, economy; has where believe the This accelerated of of Global United right the we largest place credit, centers, This alternative where the in largest in private our in to managers; we in the we're field, the be investments the world's includes and continues today. the the become Blackstone is one largest States; course, in in on the owner India, the in where

is Blackstone AI what having discuss in to moment widely of potential is a breakthrough centers, generation. in the part is acknowledged doing take artificial in transformation a drivers be essential that intelligence, data to area. an specifically today of greatest to the of as which like I'd one

I bulb. as been believe in AI when of since have the the field electric Edison in XXXX. I occurred are as what this consequences patented Thomas active personally XXXX profound light

While it power decades creation grid develop took years subsequent today to data to commercially the viable the the the the revolution. products, of over of following parallels centers to electric build-out AI has

in another for $X build States. trillion $X United And Current to United that X electricity will data the the there the to States compared expenditures centers facilitate of provide expected capital United expectations are a with trillion expenditures in decade decade. the over next over last outside to XX% growth an States the contributor need of major minimal approximately years be capital and next to in is in the demand power the these centers data increase new

is We explosive be positioning itself expertise. result in AI believe to our world Blackstone and will in investment investor financial the our to the as these a for trends largest of firm. infrastructure capital opportunities lead platform, unprecedented

of facilities consists pipeline billion Our under development. $XX along with including prospective of billion data in portfolio centers, $XX construction, today over

our data it largest a robust with QTS, other dialogue we the data holdings, center has grown since company, center largest lease Xx took private in portfolio Through QTS ongoing we customers. XXXX. Our capacity world's and have

to capital companies. equity other debt We're and also providing AI-related

example, to quarter, our the billion the in on second now package, we're the debt addressing largest financing AI-focused focusing committed $X.X provide with cloud service provider, $X.X in differentiated and needs history, a financing we sector's power For billion ways. in of CoreWeave many

this credit private area. infrastructure, be we well partner to in in platforms are rapidly large-scale energy, With of the estate, growing extremely positioned choice and renewable real

the once has place time the again, been in right important where right another real In at is estate. area Blackstone

results, Blackstone for most investors out business fact, where money. During the customers financial sometimes losing doubled mediocre their our crisis, global money in competitors forced of or their for delivered ultimately were

the sectors How clear right did capital as leader. right structures, the we market do from right the emerge with to the it? enabling assets We us the crisis own in

limited managers. allocated result, real subsequently other in individual investors to Blackstone institutional estate As real partners contrast capital and most to significant a estate

buildings portfolio in rental housing our our over selling portfolio of our by X.X and data time U.S. These estate warehouses, office With we decades. XXXX. and centers. X today global over of to compared XX% This repositioning bought that business X% real repositioned growth approximately extraordinary and eventually, the equity instead the last comprise sectors capital, estate real drove outperformance

in And environment. has performance. and Real are delivered Real estate more over rates Estate Even X.X the period, interest cyclical. costs markets, years, has Blackstone borrowing increase created of differentiated challenging a past this the through course,

its the REIT beginning of class of annually returns double XX%-plus has since in XXXX return largest share XX% example, and since for ago, inception, BREIT, generated of years cumulative a market. public than return the the more net net X.X

performance Nearly largest last returns the of data The warehouse, than XX in housing months. points nontraded Xx in BREIT's centers key has it alone XX% today basis achieved and with centers, is XXX REITs is combined. the rental the reason contributing next to portfolio X BREIT data almost larger is

real the time, the Now class. asset further cuts declining begun decline, dramatically, new is a XX% of has later real creating of estate. down the most same XX% of year-over-year Fed new the At capital cycle in We be cost to believe increasing estate construction for values types to year. which depending for helped on this basis should by

our position reinforce the forward, investors in Looking to private confident outcomes leadership allocations our will wealth will higher both result by this experienced are Blackstone future. cycle institutional further channels in and from the and we in

the world when having cycle is Real in be estate the largest should classes is business for the one of and the very advantageous largest shareholders. asset turning our

the alternatives with innovate in essential our navigate deep decades, world. And the clients, we've us Blackstone our industry. build nearly Blackstone dynamic brand The X helping them allowing firm trust is partner been classes. to reference across leading an asset engenders businesses to and for investors, a

on individual We we strategies, now XX working have more many and investment currently. are

several in credit Our our deepening the private Asia. include insurance the and expansion of markets and private in new near-term wealth products the global platform, further our channel, business penetration of launching infrastructure expanding our plans

history. more future in I great innovative on any path. done virtuous of are more Our firm is who for at in confidence and the to finance, correctly, growth. firmly essential our cycle Innovation have investors this satisfied as we as that provide create capital is point today

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

good and In our January, Steve, morning, you, everyone. highlighted Thank we business. in emerging X dynamics powerful

up was activity picking investment across meaningfully the that First, firm.

across way. that Activity bottoming. dynamics real up additional values billion commercial And the in was in of investment in Second, $XX very to billion the We with each deals. wealth private quarter, activity. Starting and a was were estate $XX committed an third, then, pending year-over-year our second XX% accelerating. firm. positive broad-based has progressed momentum that deployed these . Since

and with ever global insurance $XX lending, including invested and asset-based direct had business, with credit along its our of credit. or one quarters busiest infrastructure committed, in billion BXCI,

royalties in the take a In private included commitments U.K. business new India. music privates broker and fast-growing in equity, Japan, insurance X in a

the for billion flagship raised date. acquisition in a which bought than Tropical we've period private cafes. equity the Smoothie, we to Back This fast launched franchisor casual our a for U.S., corporate more $XX investment

of of estate January, Green In were did year values made the had year. place. real were X estate, years. estate, real in X real consecutive of in coming Since nearly call months value bottoming over X.Xx as has I same first $XX into We in flat the or increasing for time said, deployed approximately January we billion we of the the X first the period conviction? with What recovery Index our last months do pillars Street's private the in and that values

portfolio, the spreads single capital debt assets significantly own for with while improvement. sales declined our base has availability moving rates and up cost bidders more to the In now borrowing driving of we're lower has capital seeing show price processes significantly. of increased Overall,

at construction same XX-year and U.S. the warehouses sharply time, concentration. new both are buildings, and X starts areas of lows apartment the for largest near or falling are in At our

demand, by supply for very values. For a market this positive long-term is and driven

substantial under remains sector more troubled pressure office to the emerge. Nevertheless, likely assets with

traditional minimal For its navigating we challenges, U.S. has equity creating Blackstone, to on the Exposure sector's in in senior factor been an expansive important focus is public loans as have although portfolio. office higher mortgage our REIT, our we've discussed, some exposure dislocation. in

majority rental centers, is Blackstone very in portfolio concentrated data real housing logistics, With in the a and position. differentiated vast our of global estate

$X.X exceeding nearly in billion in channel We $X.X in rates $XX the years. our half X with second and of the vehicles, the to momentum quarter Moving what quarter. the the BCRED XXXX. the first private from where individuals our the way already accelerating. in level billion we second highest raised led in $X of year, quarter, in business, billion In the all billion overall over we the raised been has in raised perpetual wealth

signs encouraging on in BXPE new raising raised its a first billion best $X.X the in billion sales the reaching front, months. the QX, $X.X in seeing quarter in BREIT And million quarter, X $XXX over year. is

June months of The vehicle down fulfilled performance delivered repurchase positive July. and February. further XX% every down last XX% in X has declined from in requests XXX% of the year, May have Requests month were peak from since straight month-to-date has and

time, wealth perpetual been with As We over we built follow leading industry our saying ultimately in X large-scale we've flows in $XXX performance. for channel some vehicles. the platform believe a and billion

We including have year. we to next X market in by to plan development, bring early more

provide strategies and First, invest vehicle area, expansive a in investors across equity, breadth our an credit to the second, access will will full firm's secondaries and including that infrastructure of the that platform. vehicle credit this

Multiple market wealth momentum other Our showing commitment private to trillion is areas ever. of are stronger strong the the today. than firm $XX

Our in an demand and thriving environment insurance of investment-grade higher business accelerating strategies. noninvestment-grade rates interest is both and and credit for

the our with less last defaults Our outstanding of points performance XX in noninvestment-grade minimal over XX than months been has portfolio. basis

where and scale are on and larger Our favorable where us the to allows focus is more of quality sponsors investments higher. borrowers competitive dynamics

with senior XX% lending helping $XXX document the challenges on portfolio, to borrowers, business, provides positions of of and loan-to-values average the sole XX% with control secured drive U.S. or our to loans. significant lender direct equity if In our in our arise. nearly global billion negotiations dialogue subordinated emphasis approximately any We're us cushion lead our

which business, asset We careful portfolios to greater migrating We is selection our credit. our on of primarily yields XXXX, placed first and experience XXX the deep by goal dispersion insured performance sector higher originated us believe basis credit. and a declines of billion spread a nearly comparably generated credit world In deliver A-rated credits excess of in of their up differentiate in focused in liquid versus half to our year-over-year, average XX% approximately scale, $XX of will or rated credits. liquid investment-grade portion private points

XX% our asset-light year-over-year model. grew AUM to $XXX architecture interest in Our billion, insurance client strong driven by open

expect significantly XX relationships our from We and business have grow we and here. SMAs to strategic today, large X

to infrastructure. Moving

across and including infrastructure platform exceeds Our other strategy, billion, $XXX and credit perpetual total now noted, secondaries the investments. BIP as Steve our firm infrastructure equity

this billion milestone, up one XXXX. become ground built XX% the largest $XX been including reached fundraising, year-end from of in Performance We up has the world. from BIP the to platform the exceptional. specifically July

BIP co-mingled inception, by beating Infrastructure X,XXX annually since generating Public per net basis the Index returns year. With nearly strategy XX% points the

positioned to well funding infrastructure including are digital globally, We the energy infrastructure. needs projects address and massive for

on of in Just last fund renewables portfolio invest drawdown of alongside comment wind nearly where our quite in and business, excited a we're week, are about. number developer NextEra, to a country. largest public projects U.S. there we initiatives $X in agreed solar the final the billion A the

in vintages billion few Equity fundraising These to the our billion Equity $X fund, strategies. and Sciences Secondaries Life Asia next launch multiple Fund opportunistic include Private to strategy, credit $XX the the expect or Fund. of for launched $X billion private $X new billion quarters successors We've Private

All as in and, have expect most new cases, to current and the track vintages we funds. than larger as be strong the least at large hopefully records,

has While improve. challenging, seeing the been we're from markets LPs as more receptivity environment fundraising today

increasing Importantly, around and when we is holding that hear are to the meet what their world, to consistently or with our Blackstone. alternatives they clients allocations we

relying sticking multiyear track third-party is brand model on power to from In of our stronger manager grow. record, emerging and closing, our being and before, than our of our higher our the a even cost capital firm asset of people this period of we're with

With will Chae. very Mr. to over that, our things I turn capable CFO,

second will the discuss results and momentum in then Thanks, we'll and with The the outlook. Jon, performance and review quarter delivered firm I good first morning, financial today. in everyone. fundraising as positive you've steady deployment, results investment and heard

trillion, AUM of $XX engines to months. XX of the to range quarter Starting X% in billion billion continues with expansive results. with new increased The over year-over-year growth last levels. $X.X AUM firm's record power to Total $XXX and inflows the

$XXX Fee including level XX% the $XXX second quarter, earning billion fee-earning in billion by X.X years, to inflows billion. also AUM the were period, highest in lifting LTM the $XX for

private quarter AUM fee We fee billion equity activated which, energy investment the periods corporate representing quarter, and flagships $XX were in with holidays for and along as wealth, PE second the our BXPE of end, in aggregate. transition of private in

to holidays, management impact quarter represented temporary a fees $X.X the of year-over-year second these Notwithstanding management at X% in record the base in year-over-year from Notably, billion fee increased the firm. quarter. QX fees consecutive the growth XXth

came the $X.XX Fee-related fee-related decline periods hurdle. of Estate from earnings below BREIT, was revenues its billion prior in year-to-date the were comparison $X.X FRE to The including by in as impacted or Real positive modestly performance segment, a appreciation in per share. required

lending quarter. million. rising impacted our revenues segment to These in direct and XX% with business, revenues These and the the from the second the steadily in carry performance growing credit favorable year-over-year factors decline insurance margins FRE their $XXX partly firm's offset by are contribution margin fee-related

$X.X quarter baseline earnings the share, by or Distributable were the consecutive of the of QX representing over second earnings year-over-year. firm's in billion. with per $X.XX BE X% was XXth up fee-related billion quarter steady FRE $X underpinned

of scale to second it yet backdrop Net realizations in India-based and the number still private company not reflective platforms housing in subsequent an sale of a we stock care private the including of executed in robust as and company. the in second services equity the quarter, of leading of said, one sale and public is dispositions. relates concentrated quarter were business, in technology $XXX a sales a stock Korea, but India that holdings the finance Asia up of the largest million IPO of of year-over-year, That our health

performance. Moving to investment

last with led energy Our transportation healthy appreciation the private quarter, sciences. over by in infrastructure. funds overall generated XX% reported infrastructure, digital, XX across appreciation second Infrastructure the in and life quarter months, credit strength gains and and X.X% broad the in

estate has credits the credit XX% quarter credit, second single default the in the for gross no platform in noninvestment-grade positive credit appreciation XX generated of center businesses quarter. driver another in debt period. for continuing Jon quarter firm In again overall X.X% XX against private private our was quarter. private The as backdrop in data months, and second less and was outstanding rate the the points fundamentals. for a the in and basis The new of our a return Our reported X,XXX-plus largest strategy we LTM defaults across infrastructure market with than last the over noted, real

the a X.X% and absolute consecutive BXMA, XXth performance, for months. return XX return positive Our gross XX% reported of the the platform, for last multi-asset quarter investing composite,

delivering over BXMA longest markets bonds years has done resilient record. equity the all-weather on and an past extraordinary the volatile job through and drawdown deepest in returns several

return start a second cumulative the XX% The portfolio. period. traditional and nearly is the in for appreciated the corporate absolute XX-XX Since of quarter the composite fees X% PE XX% XXXX, the funds double or net of LTM

stable overall with continued companies reported margin growth, revenue operating strength. Our along mid-single-digit year-over-year

values office the In quarter, in was office portfolio, stable offset life certain overall strength estate, logistics. including our This by and in other and in supported data by were factors. global real sciences centers declines

performance. One on final highlight investment

delivered of for treatments under life LTM standout epilepsy XX.X% forms appreciated a funds period and positive dedicated sciences second disease children. the a quarter. in remarkable cardiovascular prevention, for The and development, milestones Our after stroke XX% business achieving including for multiple rare

of innovate the many and our is into for this investors. of megatrends to of and over the growth example large-scale translate The benefit businesses yet another business years performance firm's ability

step-up favorable over a to Turning earnings the time. the in place putting in We're foundation for outlook. power

net of terms in realizations. First,

markets performance revenues, firm's meantime, revenue with AUM we eligible revenue previously. to record continued as in these a build, reaching between at in end. improving potential the near-term pickup and a underlying ground quarter expect $XXX has stated lag billion In the We the performance a

Meanwhile, firm's balance sequentially store on value, grew per or net accrued $X.XX sheet, the billion $X.X the performance share. revenue to

As realizations well a net markets heal in are improves, significant and positioned for acceleration liquidity over time. we

We material In step-up fourth in drivers terms anticipate a FRE. note. of of in FRE multiple the with quarter

First, will flagships QX. month. energy holidays corporate holiday their holidays. fee will in fee fees months to and exit its The coming fee management transition and exited with management in PE generate BXP full the respective this respect

scheduled fee-related gains X a with of respect performance full as infrastructure crystallization event accrued of significant years respect with the BIP QX to as includes terms in strategy first Second, well revenues. comingled gains. to for year BXP's XXXX crystallization

XXXX, forward Looking full we benefit will in that vehicles the year activated XXXX. the to were see of flagship

throughout major We flagships also secondaries, strategies. other other course equity expect sciences, of to Asia raise life XXXX, private and including equity the multiple private

on In addition, platform expansion the our with grown insurance innovation business by continued we drive a in is expect has and continue years. perpetual our X nearly year-over-year quarter. XX% of And strong Blackstone forward. strategies, increasing which at The performance of of positive the engines importantly, to the dual X.Xx firm in the past segment FRE trajectory credit second

today's the against is backdrop well multiple with exceptionally In firm evolving closing, engines tailwinds of positioned powerful structural and growth.

long-term invest and firepower to flexibility the provides is right. to Our when patience sell assets the time and capital the

about Blackstone. are the future We optimistic very of

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

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

credit investing. equity. and pickup equity steady, perspective in deployments private the in on to we estate X with And So real sharp your see piece and was the is quarter. both nice businesses, commitments on more the wanted It get to my question the

in real billion a second and quarter? billion run by given just driven going uptick So forward, rates see think activity really estate, $XX that PE do the likely in progress good and already half this run the $XX further is rate deployment stronger achieved or you levels commitment we'll you

Craig, So a good question. it's

growth activity. of number, a forward of fact $XX I are have picking buying We an indicator at volume our that exact the think business, that good quarter last picked think, in up some, deal equity across in a it's up. of while lot of good business, . I hard to but the I is seeing we did, Israel. activity positive what the this business put in quarter, is has a signs. billion The just ERP clearly we're would strategies our seeing an end our year-on-year. We're first our there secondaries committed say very software that

last infrastructure, equity, more but little bought as are I busy. definitely of year's couple And we then an estate, a double We quite we've in in level. think India. talked private over We the in activity episodic, bought leaning about. companies brokerage insurance global. a Japan. Real broad-based

We of said virtue platforms We in the that would a indicates software solid to food United and sort transaction of online it activity. be and and increasing bought getting full Europe. briefcase by fast some quarter, indicator And in business I I last here bought there say should States. levels continues be my

markets conducive, think we I people more reopens, more investing the overall positive. straight selling So seeing trend hard coming say being line, as rates we're a assets, lines that IPO it's the the are market should fact the see down, to but on It's think I more. thinking about are

go next Cyprys Michael Stanley. with Sachs. Blostein We'll to with Morgan next Alex Goldman go to We'll

estate and that areas area BREP But around Jon, could as point deployment in been on an building guys challenge. we ramps on hoping I XX, making what other believe, it's maybe was fundraising? mean on of are for a of real just progress Obviously, activity as picking could nice I well. deployment you up. in go your somewhat

be outlook you fundraising come will it and think XX there real soonest do next estate the over areas the XX what comes when months? to back broader to to So your

the estate in on sentiment portfolios. investors been given real for what's of pretty has obviously, negative much their happened Well,

over fund. raised for $X We've our been latest billion European opportunistic have We an outlier.

billion a real our estate $X latest We've over now fund. little debt for raised

little a into they're see think they of open-ended funds a cautious I going more more be going till pickup. to

just probably a to to wait the because people better before, get went it a area that's better to numbers of the then period we've more financial if think jump about of feel back this crisis, investor But an for sector muted start I is you and to in. they little time seen for caution. a

the conversations the tenor of say estate will improved. have I around real

logistics, that I is the important fact prices the reset performance, think and differentiation out really than looks pointed and rental housing our things, very and in significant data I done, that the we're are capital centers, financial to it's different back I in. get like interesting think when our crisis, the recognizing moving time X we've time, that direction. take and it other an this a but of see one people Steve the of see investors bit which may think have remarks of we'll performance to people think and allocated how quarters dispersion I in and his And

think, travel the of path good. real of estate, I bit in is in experience investors have the But a us take the had just time little think So will it of here, because I for sector.

add, just I'd Alex, And it's Michael.

X powder. and of timing In to in fortuitous terms over obviously, being being with X really I position billion the years funds those our the terms amazing dry drawdown able of breadth raise now or think of a was area, $XX last in

in to position powder drawdown have good those a subject the where And invest from raise, opportunistic dry to so lot fund we're Europe we of a vehicles. finishing

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

middle that space in what and might deal update you see There multiples a asset-backed Curious been announced opportunity get partnerships the than flow asset-backed in we the if we was finance? and market there's lending. guys, today, on but of another larger a tremendous outside amount of little be bank news

opportunity So I what you on wonder help already? the ground the if you and remind have could us frame

you're a out a particularly clients take the credit, asset-backed investment Well, in in of costs private lot big I opportunity ABS think is area I an higher think returns of can in because offer to because grade distribution sector, it transaction. able the you

of And seen a area. so in we've interest tremendous this amount

digital, area. in fact, energy, we big be asset-backed could it companies It seeing a have some finance, those green XX X SMAs and fund could be partnerships of transportation, piece could tremendous virtually with from of just be insurance away amount finance. residential. strategic all of talk interest about be could In We're this the

building of been We've the platforms. number up

banks. investments We agreements smaller with some partners. been making have partnerships, strategic flow our We've from

balance and very have sheet-light market trillion a I more. seen see that area in $X think As big would know, expect and a our like and low, something of to we a is the you'll volumes approach pickup penetration you in But remains market this. terms we have this I

build-out infrastructure, I point which be an out is AI also that finance. I that will the dwelled really much on, of would the and of Steve important, think asset-backed

expertise, more about And ABF. fact be so scale the that equity an if in think a of support areas allocate to to that's And and we data and capital. centers have and of companies, both that, will going invest power that in it you the financing credit have financing makes enormous lot investors business these insurance particularly want

days of today. think the like these as in good this penetration. assets, because us dialogue at to firm the feels very a as appreciate additional really spread early anywhere And holders in market, terms are big it long-duration I area is So and the

go We'll Piper Crispin next Sandler. with to Love

approaching. depending White Just the in also election just deployment Can environment President intermediate what how then be Biden you and to and you between we differences election, you occupying see rapidly you election or picture to on the that the would biggest term then a expect the the question what could prior to U.S. realizations? just the with that and speak impact big And near-term to beyond on perhaps House another could Forward impact change President Trump your how November? in and Blackstone activity expect Democrat over the or the how

be I frankly, on what's inflation. doing, happening things more I particular, with of with the are how know Republicans think I think press focused and on coverage, preelection side, the of in rightfully lot on a are course, investors, Democrats, the there look. economy how will

more good prints cover inflation air how Fed to more will be cut the we get that But on I if think of that rates perform. gives determinative markets

So on press really be itself. will lot though on key that there is keep your thing eye think focus the a to I of the even election

see very could you different post-election, I some policies. think

of blue I look, on. would what and environments, purple the returns in red think that growth trends we've focus power, value. the And in of customers, constant for lot us we've focus Life determinants what's just the these digitalization, up we a on is happening what's we credit, those and are operated say, the alternatives private long-term long-term delivering and that's and great back we in for happening talked of about environments, our Sciences, business, in

approach on Republican very into could like There that being businesses. in areas different regulatory And obviously hydrocarbons there terms said, On certainly what being you you be different could factor energy, antitrust, a in and believe. you front. you you have differences. the out would will versus in have about terms a happens renewables, tariffs in That think differences maybe see different here, Certainly, see administration would had be to policy I higher broadening you a will posture, investing. of a of to and that and see manufacturing if

really think what regardless be will we driving look think the the So we in long of a there we're big returns. like. are item of term may wins, good which on sectors and the some is huge of of opportunities sense terms And these those pretty think things focused good I higher news really have side critical I in where that

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

FRE coming you're Maybe the funds credit management with a say, you're as holiday 'XX side, Obviously, in deployment new as -- or want I should whatever perspective, you 'XX obviously, fee-related in over off a impact the excluding FRE performance should and FRE base coming certainly margin think market margin. but from about know on the Michael, step-up for you've set of be question scaling into to 'XX the funds happens the I the as on time, up with and for in we building an margin these fees margin scale the said fees? of FRE Michael

questions if just product. ratio the the FRE by what is, that you us you [indiscernible] there, could basically, think but base maybe [indiscernible] what margin then overall on of few ex And But comp the depends question. in remind -- a

near the of ex certainly one we leverage term. term. of Sure. I and in long underlying Look, think the the and think And operating over for sort baseline trajectory is margins, stability

variables have quarter, as correctly, of in to I be mentioned, performance that energy holidays this revenues X fee will think in in holiday funds note we'll some proportions level private activated that on holidays term other second fee equity fee-related sort level the transition the of near and I both the key of you sensitivity half. in

year So performs into we'll the next really in latter second, it level revenue. of of come and through part that . And the sensitivity if year. then that

other side, and infrastructure, fee-related stage new fees. represents plus effective this its large at direct do been a performance scaling we've on with incremental core as this margins business, higher out of generally lending as for the lower So revenues building it margin crystallization first modestly incentive And carry that carries development.

FRE dollar course, very well, that's of and positive basis. performing But it's for on extraordinarily an been absolute

mentioned that leverage. of So the factors overall, longer in in margins over the year that relative we'd near stability of within cited. reasonable expect and picture it that time sort operating term, a last to then full year. I you term, be function of of to of a falls And range where sort

you think right. So picture the framed I

very to right and basis, and you into couple obviously, near of on we're I the alluded variables optimistic long-term comfortable about it. both think the in a XXXX. And term

JPMorgan. We'll to Ken next Worthington go with

positive large. terms talk private an of of can industry Two opportunities business, the competitiveness secondary the secondaries these the about you Maybe things. there's In and days? equity at of deployment commentary been overwhelmingly course from

and in your performance asset other investment equity secondary classes recent table then private years. And returns in your trailed has

I think to date. in up in X% 'XX, 'XX, up X.X% and

flagship to in raise here? factor the anchors As able a next are more you go confidence what and money vintage in being fundraising, your secondary returns into

I seen on is now say, One, in just happening secondaries for for you business. time. What couple what's if double-digit the need of of things as alternatives, would grows. a look which at So a is in period has class that long growth an grower liquidity been a the the alternatives, we've asset

the low you terms it's liquidity. NAV for which business, why XX grown in continues And with a even our ago at most at grow. secondaries has at of And of started for eightfold, today, is to asset we if which billion the in years look funds, of liquidity. and $XX classes secondary's X% there's so that's so And volume underlying trade, need business to X% very

sector, So as that deployment today as a clients -- also, the creates secular that and the of know, and we've fact there over is opportunity. the in enough is, a creates you liquidity there's alternatives targets, creating their what bunch that's not grow, in this opportunity. And growing, sector are sector, it market, institutional the is seen a

in overall, Yes, at you you recent feel returns, player quarters, returns, strong, but net on think look mid-teens remarkably since not as or the returns. space, good. the if largest teens very been they've When in high So inception, comment we, funds, as latest those I strong. higher

confidence flagship out high. think when So level raise going extremely we to is our next back our fund, about

Our I something incredible is think, equity would done [indiscernible] job there, billion The larger. our an was expectation for last private we secondaries raise vintage, team our $XX business. has

really structural are a to returns. feels So Blackstone. is well a real it to bit favorable, continue here think is beginning positioned at can segment we return that's risk like to it that inefficiency growth generate that you driver a that of Clients and attractive recognize is there be the allowed

and on add to Just to point. Jon's reinforce

see the or the XX% say record, last invested on the First return said, X and you long-term And private investment Jon business. I would versus all, across most of noted record, the the you track so, funds, recent the as sort XX% year of XX% equity. in in could net.

lag relative First as there the business to you reporting know, a secondaries is, underlying of on GPs. the all, of

and see mature muted think tend than lag business. that you'll Moreover, I'd in of the returns, I investments to cyclical what in is so and terms more have the business will say portfolios of the own more rebound degree some the be overall to equity also in market and secondaries private that nature our

of at outstanding the to There's term, track deal also a long and term. year short fund in level those benefit overall, the returns flow But that buying a ago comes the of discount a the variable funds the an record. around from sort it is

next Dan Jefferies. with go We'll to Fannon

the the deployment? mentioned context hoping get you buyers estate accelerating was more which could expand in you confidence Jon, obviously the real around environment. estate and I you're to a out of broader your more seeing real think I some more the bit is market, on around a fundamentals fueling but little in hoping

office So couple we've emerging. time, what the rates you of know and today said challenged. a sort the for estate through more guys is on sectors, that fundamentals and said, are I'd work overall going it's to that. In we real estate, because about real of, other there as Vacancy are are we've offices, while say, signs is very been mid-XXs, In some in talking positive certainly it a picture, take to are the better.

in of you positively X%, pretty vacancy. has in XX-ish think logistics Very bit, starts. the those warehouse peaks X% XX% has and softened steady, but the U.S., starts, come If in I'd percent supply about a areas. apartments from in down Demand say, multifamily both

the So that's been very volume thing and cost of has transaction price capital. good has long term. really availability near-term But that impacted and

points Spreads basically the XX-year went fall, you were was was basis XX basis and to higher more market it wider, the is if closed. today. back points XXX CMBS or the So probably than

that the exposure, is bidders Xx pretty significantly. logistics have and of rental assets. buy greatest housing, showing And sectors be we Xx, changed those would our where in to up more which we That's see result

I So is clearly that think a positive.

look as where here, rising the have rocket see sentiment We improving. but seen, quarters, and definitely the have of I property have sort ship noted, V-shaped and some Green been Street flat is things recovery said we don't report, if at we you X

you've of capital So cost got better environment. a

And of decent you financial us. from years, there headlines period troubled fundamentals, a the next for was back 'XX, and deals crisis, great course, went You've in the got of we groundwork. that of of negative it deployment and the summer the plenty couple deploying sends if to started were for still

there some on And ground, have some what future. is The be similarities gone the because and negative assets we're prices planting we of away creates environment. troubled But will think, some and seeing there's system. And that through we're have doing sentiment, stay the today. a headwinds now to will for these still seed favorable the cleared work

the will pay done we've investors public dividends these privates to European real in huge so in big our the U.S., we push think time. for And this over logistics,

We'll to go Barclays. with Budish Benjamin next

wanted to specific on one a ask I BPP. maybe

the evolving And next, to around about an redemption X you with then the the update sounds sort should happening sort queue? think estate performance inflows picking there your on medium If inflows like and it fund months? to real the potentially near outflows of term, over optimism on we of could say, that of and up over give how XX based

our across pickup. of single plus in digit of core a On terms BP see It's Yes. a our little institutional product we've the seen still business, bit redemption line.

this that capital in we providing as in vehicle in, of time. think, coming I on based than you have what individual know, different our it's new investor liquidity terms over in

that have in to investors liquidity. a recognition takes get period the this time institutional And it like a

time could of buy little particularly before As take see some discount folks to investors about they said open-ended on earlier some starting my expectation bit thinking forth. funds in more will and I at a interest, be feel would a We're fundraising, a confident. little so

Again nice say very starts as positioning. my what And fundamentals, how on the way would muted I inflows a little performance, more portfolio think over bit of we've near positive see we've question the term, I I as exactly can that's would on here time up estate to expectations this these deliver a but over shift. a set be for cycle. here, real the of working happened. we certainly it's But portfolios success done through But our in think job terms

see people in post-financial crisis then If their they you what went Interestingly, the you period. the redemptions want and that is from back deployed to get case to pull queue.

pull want the maybe then back. when that So cases, thinking in they many liquidity, well, I get queue about, they world turns, the in

that cycle. happen what to as So tie a well. is over I obviously here in time could happens the think it And

We'll go UBS. next Hawken Brennan to with

market allowed the actually you limits that a more So is I can the who that at tightening all impact we better you that? was appreciate and the saw sign above BREIT back of limit saw during given strength. the to speak curious, in the wealth quarter, that the positioned redemptions for of went on redemption and SREIT you dramatically totally of I clear

that on market it's risk appetites? had what about So more and that BREIT, free impact that specifically, not about but really maybe as

in As were nervous. investors as investors manage got you come from down the BREIT pretty We saw noted, way. differentiated we redemption liquidity sharply, to there short-term BREIT XX% in then in assure impact levels. May May that specifically very able was we specifically in June a And in a

remarks, month-to-date in noted I so And far, additionally. as down my they've come

happening We private have wealth a of channel. much frankly, in what's and dramatic of not terms change the or change sentiment in seen a

in think specifically, waiting bit. still a here seeing are estate, and real investors I

and inflows out pointed BREIT BCRED had we has been in the that we years in successful has quarter launch in quarter, the had in our in significant best to year. a very fundraising; money, best BXP months. Although and a first continued in its X raise X

the about same what story is that's what our drives performance, as It's this things. institutional that's Ultimately, matters, business.

the how the net REIT BREIT years, capital, more than X.X and deliver index. public invest we where returns. remarkable double-digit over we And on focusing returns how assets and relentless you manage are look at since inception, We if double we

getting net BCRED, through start matters the for additional the at to what structure work, underlying confidence. frankly, and will I ultimately seeing people is look think this returns And in BXPE. our period This this we've And semiliquid what double-digit downturn give got do. a is think clients. You strong to I

that's we about that. feel the wealth So to do as ability as good execute, continue think channel I key private I our long in this to and

extremely So channel our confidence in the high. remains

next go Katz TD Bill to We'll Cowen. with

discussion. pick to on Maybe retail the Okay. up

were terms platform. the very in building You and early obviously of very prescient

and of players number years that. very last a the big new of focus pickup into been However, has

wealth you the are wondering, shakes the sort how competition the out? see allocating denominator. playing brands? And to how think out how look management of of So ahead, was the how the do intermediaries of certainly But of bigger evolution as how with terms you big -- opportunity advisers the a do conversations and they're financial I you in

opportunity of is this now. and large-scale everybody industry It's recognizing definitely the an in area

and team on focus people individual other underlying that's our firm well build and that standpoint, BDCs structure, create I to before innovating, work out cost led to and down person had what think serving credit innovating really products by tax liquidity into existed to this their to investors a things very clients, creating on to REITs, [indiscernible] also in XXX-plus now get from global brought focused cost nontraded significantly that nontraded from historically perpetual financial a standpoint. these advisers would

think funds brand. space. people. advantage I perhaps I The that our built investing job firm think drawdown the lot with of end us And great for the remarks, with our so more and in we have the at our a I in of we is but competitors products delivered move investors up have a the on in and we that along channel we've is will know feelings. the and most of positive such into see have trust touched us, done the BREIT powerful sold BCRED capital my Investors decades the have it and we've individual of goodwill because X relationship asset into the results we and reservoir

remarks, in the in new I about and we're continuing infrastructure innovate others to multi-asset show, So here. will think We talked credit. products but

get wealth, equity say of to I firms, there brands market thousands think I'd in firms individual versus scale, I have you to going the to the credit service. you can private market, the the matter, advantage or and real one think this when ability thousands are the private institutional estate firms,

will it a something of great advantage, performance great and it meaningful we a we different. absolutely And are and have underlying of to assets, customer. billion the think smaller over but be total committed first-mover pretty I service requires time, will $XXX players grow that in number segment. to delivering And It

this marketplace. So things We in to market. do large our to going will competitive. Others very first-mover be like we more recognize really growing we but the and it's try in them, respect position

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

fairly flow for guess, mine low dramatic to net have quarter. AUM was gap asked. a the of gross realization in Most been I

that And of a moving was taking flows, was you should trend step large? result extent gross strategies think included if expect the so, if is that more a we the So a of a is do basis between to could rotation XQ that of assets And then any? give you volume in what or on this go-forward indoor back, uniquely funds?

Yes.

allocation there shifts it's over to there segments. of of some -- in nature That I a of have and funds involves dynamic. think, time, how bit degree, work. has that been businesses some cross terms that more and of been, Patrick, capital between the the open-ended those

couple and move in between -- had, that from the a of standpoint, also, a quarter, BXMA. of businesses reporting And we the second credit

more to -- but So of different the over it's dramatically the of going nature it's not that's that, involves time. I been business, be think not

question last line from BNP. of Giblat our the with take We'll Arnaud

just X.X wondering new that A think think why European versus of the could quick the material roles wealth channel? if U.S. much with question channel. with you the semi-liquid us European a share in to are lag products I'm offer to you on the wealth refresh so products? likely And opportunities you do the grow rules the [indiscernible]

Europe. on So the we love be I'll week, harder it regulatory there front. is but next

completely of If you different products the at have private rules Union, by you wealth set almost country. for European look

updated technical. need definitions And the do the can be invest who of some investor, believe rules, professional the to is term of I which

you limitations very are structures of There use by and country are can lot the a different.

capabilities. We although Germany. direct having attack small. or lending up Italy have built European Spain success with platform, it's We're still to and some you lot Switzerland than our today So of different a

we're -- be I We a averse, this bit risk to strong European we're for work Europe. their just want it investors. going They user-friendly think more designed the be to little in I same a at stick regulators high. will of bunch. try do to in with tend environment. to And the make We're them a persistent ultimately to little desire But as for more think that's as works you will a thing a product and investors want U.S. know. returns

the distributors, the as And financial this big well. institutions recognize

it's So a think I long-term process.

I to will, I wealth over it think these time, And Japan like the sense make think selling think in We've lot customers. because we a that seen places hopefully, I products. private in of for some products changes see changes were change. Europe conducive can some of

So we'll it probably going time. some stick at and it's take to

for this question-and-answer additional time, That or any conclude turn session. Tucker to closing would our like back will over remarks. Weston call I the to At

us for following up joining Thank after look you, Have today the great everyone, forward a to call. and day.