Summary of Blackstone Conference Call - December 10, 2025 Company Overview - **Company**: Blackstone (NYSE: BX) - **Assets Under Management**: Over $1.2 trillion, making it the world's largest alternative asset manager [1][1] Economic Outlook - **General Sentiment**: More optimistic than most, citing resilience in the U.S. economy despite challenges like government shutdowns and high short rates [4][4] - **Private Equity Performance**: Q3 revenue growth of 9% for private equity companies [4][4] - **AI Capital Expenditure Cycle**: Identified as a major growth driver, positively impacting the alternative investment space [4][4] - **Inflation and Labor Market**: Inflation data appears better than reported; hiring difficulties have decreased significantly from 93% to 30% among CEOs [7][7] Investment Activity - **Capital Deployment**: Approximately $140 billion deployed over the last 12 months, with an acceleration in investment pace [10][10] - **Key Investment Themes**: - **Infrastructure**: Significant investments in data centers and energy transition [11][11] - **Secondary Market**: Strong position in the secondary space, providing liquidity at scale [12][12] - **Geographic Focus**: Positive outlook on India and Japan for real estate and private equity investments [13][13] - **Areas to Avoid**: Emerging markets outside India and the Middle East, and businesses at risk of disruption from AI [14][14][16][16] AI Investment Strategy - **AI as a Transformative Force**: Investments in infrastructure supporting AI, including data centers and energy [19][19] - **Risk Management**: Continuous assessment of AI risks in investment memos; focus on transforming legacy businesses with AI [25][25] Credit Market Insights - **Private Credit Growth**: Rapid growth in private credit, with a $500 billion portfolio that does not rely on balance sheets [32][32] - **Credit Quality**: Generally good credit quality with low loan-to-value ratios; EBITDA growth of 9% in portfolio companies [34][34] - **Market Dynamics**: Private credit is seen as a structural change benefiting borrowers and investors, with enduring premiums expected [40][40] Wealth Management - **Market Share**: Blackstone holds approximately 50% of the industry fee pool in the wealth market, with $290 billion in assets [41][41] - **Product Innovation**: Focus on delivering performance-driven products; potential for new collaborations and multi-asset credit products [44][44] Real Estate Outlook - **Market Recovery**: Signs of recovery in real estate after a challenging three years; demand for housing and logistics remains strong [55][55] - **Investment Strategy**: Active in privatizing REITs and investing ahead of market recovery [58][58] Fundraising Expectations - **Positive Outlook**: Anticipation of a strong fundraising year, driven by wealth management and institutional business growth [60][60] IPO and M&A Activity - **Market Activity**: Highest IPO pipeline since 2021; expected increase in M&A activity as cost of capital decreases [62][62] Long-term Business Evolution - **Growth Potential**: Alternatives market is seen as having significant room for growth; focus on delivering premium returns and maintaining quality [66][66][70][70] Conclusion - **Optimism for Future**: Strong confidence in Blackstone's ability to navigate market changes and capitalize on growth opportunities in various sectors [70][70]