Summary of Blackstone's Conference Call Company Overview - **Company**: Blackstone - **AUM**: $1.3 trillion, making it the number one alternative asset manager globally [3] - **Growth**: AUM has increased by more than 15x since the 2007 IPO [3] Macro Environment - **Investment Boom**: A historic investment boom is underway, expected to lead to a productivity boom [4] - **Revenue Growth**: 9% revenue growth in corporate private equity companies in Q4, with strong margins [4] - **AI Sector**: Significant gains in AI and related infrastructure, with data center platform QTS leasing growing by 50% in 2025 [4] - **Consumer Economy**: A two-speed consumer economy is observed, with high-end consumers remaining strong [5] - **Inflation**: Inflation is under control, with stable labor costs and a balanced labor market [5] - **Corporate Confidence**: CEO optimism is at its highest in over a year, with minimal expectations of a recession [6] Investment Outlook - **Deployment Expectations**: Anticipation of a very active 2026, following a strong 2025 with $138 billion in investments [9] - **Focus Areas**: Emphasis on AI, digital infrastructure, power and electrification, and life sciences [10][11] - **Market Opportunities**: A $30 trillion market opportunity in private credit, with private markets doubling from $6-7 trillion to $13 trillion in seven years [12] Fundraising Trends - **2025 Performance**: Generated $239 billion in inflows, a 40% increase year-over-year [15] - **Institutional Inflows**: Institutional inflows increased over 50% year-over-year, with AUM in this channel exceeding $700 billion [15] - **Insurance Clients**: AUM in insurance clients grew fourfold in the last five years, reaching over $270 billion [17] - **Private Wealth**: Crossed the $300 billion milestone in private wealth, up three times in five years [18] Financial Performance - **Management Fees**: Mid-teens growth in base management fees across three of four business segments in Q4 [21] - **Transaction Fees**: Expectation of a strong year for capital markets business due to improving transaction backdrop [23] - **Net Realizations**: Anticipation of significant benefits from cyclical recovery and crystallization of incentive fees [25] Real Estate Sector - **Market Recovery**: Private real estate values have improved from the trough, with data centers and industrials showing strength [40] - **Fundraising Outlook**: Strong interest in real estate credit and improvement in BREIT flows, which was up 8.1% net in 2025 [43] - **Sector Selection**: Focus on data centers, logistics, and residential sectors, which constitute 75% of the global portfolio [45] AI Integration - **Operational Efficiency**: AI tools are enhancing efficiency across various operations, including software development and cybersecurity [46][47] - **Data Advantage**: Emphasis on proprietary private market data as a strategic advantage [48] Conclusion - **Overall Outlook**: Blackstone is positioned for strong growth across various sectors, with a robust macro environment and strategic focus on AI and private markets driving future performance [25][48]

Financial Data and Key Metrics Changes - The company reported GAAP net income for the quarter of $2 billion, with distributable earnings of $2.2 billion or $1.75 per common share, marking a 20% increase in distributable earnings for the full year to $5.57 per share, totaling $7.1 billion [4][5][33] - Management fees increased 11% year-over-year to a record $2.1 billion, driven by a 10% growth in base management fees and a 27% increase in transaction and advisory fees [30][33] - Fee-related earnings reached $1.5 billion in Q4, or $1.25 per share, with a 24% year-over-year growth in fee-related performance revenues [30][31] Business Line Data and Key Metrics Changes - The infrastructure platform grew 40% year-over-year to $77 billion, with over $4 billion raised in Q4, supported by strong investment performance [17] - The BXMA segment reported a composite gross return exceeding 13% for both 2025 and 2024, with net inflows of $6.3 billion, the highest in nearly 15 years [18] - The private equity segment raised over $10 billion for its next Asia flagship, compared to approximately $6 billion for the previous vintage, indicating strong demand [19] Market Data and Key Metrics Changes - The company achieved inflows of $71 billion in Q4, the highest level in three and a half years, contributing to approximately $240 billion for the full year [5][6] - Assets under management increased 13% year-over-year to nearly $1.3 trillion, reflecting robust momentum across institutional, private wealth, and insurance channels [7][33] - The insurance channel's AUM grew 18% year-over-year to $271 billion, with significant credit placements generating incremental spreads [22][23] Company Strategy and Development Direction - The company is focusing on thematic areas such as digital infrastructure, private credit, and life sciences, with a strong emphasis on AI-driven investment opportunities [9][10] - The firm is well-positioned to benefit from the ongoing AI investment boom and the modernization of the U.S. electric grid, with nearly $200 billion of dry powder available for future investments [11][14] - The company anticipates a resurgence in capital markets activity, with IPO and M&A activities accelerating, as evidenced by the $7.2 billion IPO of Medline [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the firm's prospects, citing strong operating and capital market fundamentals despite geopolitical uncertainties [8][14] - The company expects management fees to continue growing in 2026, driven by robust performance in private equity, credit, and insurance segments [38] - The firm is optimistic about the multi-year outlook, supported by structural tailwinds and multiple engines of growth [39] Other Important Information - The company has executed multiple privatizations and investments totaling $138 billion in 2025, the highest level in four years [10] - The firm reported a significant increase in net realizations, up 59% year-over-year to $957 million, the highest in three and a half years [31] Q&A Session Summary Question: On the record IPO pipeline - The company plans to focus on corporate sectors, particularly energy and electricity, with expectations of increased real estate activity in India [42][43] - Management noted that as limited partners receive capital back, it facilitates further capital allocation to the firm, creating a positive cycle for fundraising [44] Question: On AI deployment across portfolio companies - The company is seeing early impacts of AI, particularly in software engineering and cyber monitoring, with expectations for productivity gains [46][47] Question: On retail opportunities and market evolution - Management highlighted the breadth of offerings available, including income and growth products, and noted strong fundraising in credit despite lower absolute rates [51][52] Question: On direct lending dynamics - The institutional side is experiencing strong fundraising dynamics, while the wealth side has seen redemptions but remains confident in the portfolio's health [56][58]

Financial Data and Key Metrics Changes - The company reported GAAP net income for the quarter of $2 billion, with distributable earnings of $2.2 billion or $1.75 per common share, and declared a dividend of $1.49 per share [5][29] - Distributable earnings increased 20% year-over-year to $5.57 per share, or $7.1 billion for the full year, driven by strong growth in fee-related earnings and net realizations [7][32] - Management fees rose 11% year-over-year to a record $2.1 billion, with base management fees growing 10% and transaction and advisory fees increasing by 27% [29][32] Business Line Data and Key Metrics Changes - The Infrastructure platform grew 40% year-over-year to $77 billion, with over $4 billion raised in the fourth quarter [18] - BXMA reported a gross return of 13% for 2025, with positive composite returns for the last 23 quarters [34] - The private equity flagship in the wealth channel, BXPE, achieved an annualized net return of 17% since inception, growing to $18 billion in two years [24] Market Data and Key Metrics Changes - The company achieved inflows of $71 billion in the fourth quarter, the highest level in three and a half years, contributing to approximately $240 billion for the full year [7][8] - Assets under management increased 13% year-over-year to nearly $1.3 trillion, setting a new industry record [8][32] - The insurance channel's AUM grew 18% year-over-year to $271 billion, reflecting strong demand for private market solutions [22] Company Strategy and Development Direction - The company is focusing on thematic areas such as digital infrastructure, private credit, and life sciences, with significant investments in AI and power generation [10][12] - The firm is well-positioned to benefit from the ongoing AI investment boom and the modernization of the U.S. electric grid [11][12] - The company anticipates a resurgence in capital markets activity, with an acceleration in IPO and M&A activity [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the firm's prospects, citing strong operating and capital market fundamentals despite geopolitical uncertainties [9][15] - The company expects management fees to continue on a strong positive trajectory in 2026, driven by growth in private equity, credit, and insurance segments [36] - The firm is optimistic about the multi-year outlook, supported by structural tailwinds and multiple engines of growth [37] Other Important Information - The company invested $138 billion across the firm in 2025, the highest level in four years, focusing on areas with significant growth potential [11] - The firm has nearly $200 billion of dry powder available to capitalize on future opportunities [15] Q&A Session Summary Question: On the record IPO pipeline - Management indicated that the focus will be on the corporate space, particularly in energy and electricity, with a broad-based approach expected [41] - The company noted that as limited partners receive capital back, it will facilitate further capital allocation to the firm, creating a positive cycle for fundraising [43] Question: About AI deployment across portfolio companies - Management highlighted early impacts of AI on productivity, particularly in software engineering and customer engagement across portfolio companies [45][46] - The firm is optimistic about the potential for earnings growth driven by AI advancements [47] Question: On retail opportunities and market evolution - Management discussed the breadth of offerings available, emphasizing the appeal of private credit and the potential for continued strong performance despite lower absolute rates [50][51] - The firm is confident in its ability to capture benefits across a wide range of equity products as rates decline [52] Question: On direct lending dynamics - Management noted strong fundraising dynamics on the institutional side, while acknowledging some redemptions in the wealth channel [54][58] - The firm remains confident in the health of its portfolio and the potential for durable premiums in private credit [58]

Financial Data and Key Metrics Changes - Blackstone reported GAAP net income for Q4 of $2 billion, with distributable earnings of $2.2 billion or $1.75 per common share, and declared a dividend of $1.49 per share [3][4] - For the full year, distributable earnings increased 20% to $7.1 billion, while fee-related earnings rose 9% to $5.7 billion, and management fees grew 12% to $8 billion [31][27] - Assets under management (AUM) increased 13% year-over-year to approximately $1.3 trillion, marking a new industry record [5][31] Business Line Data and Key Metrics Changes - The infrastructure platform grew 40% year-over-year to $77 billion, with over $4 billion raised in Q4 [16] - BXMA reported a gross return of 13% for 2025, with net inflows of $6.3 billion, the highest in nearly 15 years [17] - In credit, total assets managed reached $520 billion, up 15% year-over-year, with inflows exceeding $140 billion in 2025 [19] Market Data and Key Metrics Changes - Private wealth fundraising increased 53% year-over-year to $43 billion, contributing to a total AUM growth of 16% in this segment [4][22] - The insurance channel's AUM grew 18% year-over-year to $271 billion, with significant demand for private credit solutions [20][21] - The individual investor channel's AUM tripled over the past five years, exceeding $300 billion [22] Company Strategy and Development Direction - Blackstone is focusing on thematic areas such as digital infrastructure, private credit, and life sciences, with a strong emphasis on AI-driven investment opportunities [8][10] - The firm is well-positioned to benefit from the ongoing AI and power investment mega cycle, with nearly $200 billion of dry powder available for future investments [12][10] - The company anticipates a resurgence in capital markets activity, with IPO and M&A activities accelerating [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the firm's ability to navigate geopolitical uncertainties and a complex operating environment, citing strong operating fundamentals [7][12] - The outlook for 2026 is optimistic, with expectations for continued growth in management fees and net realizations, driven by a favorable investment environment [35][36] - Management highlighted the importance of investment performance, with strong returns across various funds, particularly in infrastructure and corporate private equity [31][33] Other Important Information - Blackstone's fundraising success has led to a significant increase in AUM, with a record level of inflows in Q4 [4][5] - The firm has executed multiple privatizations and investments, including a notable $18 billion acquisition in the medical technology sector [8][9] - The company is actively innovating in the private wealth market, expecting 2026 to be a busy year for product launches [24] Q&A Session Summary Question: What sectors and industries will you be leaning into for the record IPO pipeline? - The focus will be primarily on the corporate space, particularly energy and electricity sectors, with expectations for increased activity in India and some real estate opportunities [38] Question: How is AI being deployed across portfolio companies? - AI is enhancing productivity in software engineering and customer engagement, with early positive impacts observed in various operational areas [41] Question: What is the outlook for direct lending in both wealth and institutional markets? - Institutional confidence remains strong, while the wealth side has seen some redemptions; however, performance metrics are healthy, and inflows have been positive recently [46][48] Question: How does the firm plan to maintain growth and preserve culture as it scales? - The firm emphasizes a strong commitment to delivering for customers and maintaining a performance-driven culture, which is crucial as it continues to grow [62]

Financial Data and Key Metrics Changes - The company reported GAAP net income for the quarter of $1.2 billion, with distributable earnings increasing nearly 50% year-on-year to $1.9 billion or $1.52 per common share [5][8] - A dividend of $1.29 per share was declared, payable to holders of record as of November 3 [5] - Total assets under management (AUM) rose 12% year-over-year to $1.24 trillion, while fee-earning AUM grew 10% to $906 billion [32] Business Line Data and Key Metrics Changes - Fee-related earnings increased 26% year-over-year to $1.5 billion, driven by strong growth in fee revenues [34] - The private credit market saw AUM cross the $500 billion milestone, up 18% year-over-year, while the infrastructure and asset-based credit business grew 29% year-over-year to $107 billion [19][20] - The private wealth channel's AUM grew 15% year-over-year to nearly $290 billion, with over $11 billion raised in the third quarter, more than doubling year-over-year [24][25] Market Data and Key Metrics Changes - Inflows reached $54 billion, marking the fourth consecutive quarter in excess of $50 billion, totaling $225 billion for the last 12 months [8] - The company executed three successful IPOs in the last three months, with a robust pipeline for the next 12 months [10][35] - Commercial real estate values are showing signs of recovery, with transaction activity increasing by 25% year-over-year in U.S. logistics [30] Company Strategy and Development Direction - The company aims to leverage structural tailwinds in the alternative sector, focusing on private market solutions and expanding into digital and energy infrastructure, private credit, and Asia [8][9] - The firm is positioned to capture opportunities in the defined contribution market as it opens to alternatives over time [8] - The company emphasizes a long-term approach to investing, focusing on sectors with strong fundamentals such as data centers, logistics, and rental housing [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the firm's growth prospects, citing a resilient economy and declining cost of capital as positive indicators for capital markets activity [10][39] - The company anticipates a resurgence in capital markets activity, which should lead to greater realizations and support fundraising and deployment [10][39] - Management acknowledged potential increases in defaults as the cycle progresses but believes their structural advantages will continue to yield superior results [12] Other Important Information - The company celebrated its 40th anniversary, highlighting its growth from a startup to the largest alternative asset manager in the world [14][17] - The firm has achieved significant organic growth, distinguishing itself from competitors who often rely on acquisitions [14] Q&A Session Summary Question: Changes in credit quality across the portfolio - Management clarified that recent credit issues were related to bank-led credits and do not reflect the private credit market, with minimal realized losses currently [41][42] Question: Plans for the defined contribution business - Management indicated a focus on building capabilities in this area and plans to work with existing partners while awaiting regulatory frameworks [44][45] Question: Brand strategy and marketing evolution - Management discussed targeted marketing efforts, including a recent launch in Japan, and emphasized the importance of expanding their footprint in private wealth [47][49] Question: Feedback on BCRED's dividend cut - Management noted that the reaction in the wealth channel has been understanding, with expectations for strong flows in BCRED moving forward [78]